Q1 2022 Epizyme Inc Earnings Call

May 10, 2022

Today's conference is scheduled to begin shortly please continue to standby. Thank you for your patience.

[music].

Hello, and welcome to <unk> first quarter 2022 financial results Conference call. At this time, all participants are in a listen only mode.

Following the prepared remarks there'll be a question and answer session. Please be advised that this call is being recorded.

Now I'd like to turn the call over to Kristen Hilton Investor Relations you may begin.

Thank you operator.

<unk> issued a press release, providing a business update in addition to first quarter 2022 financial results.

The press release can be found in the investors section of the Companys website at <unk> Dot com.

On the call today are grant bubble, President and CEO , Dr. <unk> Agarwal, senior medical advisor and interim Chief Medical and development Officer, and Joe <unk> Senior Vice Senior Vice President and head of finance.

Gerald corn, our recently appointed Chief operating officer will join us for the Q&A session.

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 Grant.

Thank you Christian and good morning, everyone. It's basically here with you today and to provide an update on our first quarter 2022 results.

On today's call I will provide our commercial overview of performance. It has barrick buyer will speak to our clinical development progress with Tazemetostat and BMO for one four.

<unk> two inhibitor and Joe will cover our financials for the quarter. Following their remarks, we'll open the line for questions.

During the first quarter <unk> generated net product revenue of $8 $7 million, including $5 million related to the sale of test their commercial product for <unk>.

Third party pharmaceutical company use in clinical trials.

Our commercial net sales in the first quarter of.

2022 were $8 1 million, representing an increase of approximately 10% when compared to the first quarter of 2021.

Pretty good from a patient assistance program represented approximately 15% of total demand for the first quarter of 2022, a rate consistent with Q1 of 2021.

Commercial demand increased 16% in Q1 2022 versus Q4 2021.

While total demand, which as a reminder is commercial demand plus free goods provided through our patient assistance program.

Similar to the fourth quarter 2021 levels.

These fluctuations in total demand in commercial demand are directionally consistent with prescription dynamics, we saw at the end of 2020 and into 2021.

We believe these fluctuations a result in part.

So the Medicare part D benefit design and yearend prescription patterns that impacted Q1 from here.

As in the prior year. It has good demand rebounded in March and reached its highest level since launch.

While more time will be needed to understand the impact of seasonality on the relapse refractory FL market and has the demand in particular.

<unk> by this demand growth.

We continue to be optimistic about prescription growth for test based upon physician feedback data from our <unk> survey and recent changes in the FL treatment landscape and subsequent updates to treatment guidelines.

Recent market research suggests that has good market share continues to grow in the third line relapse refractory FL study for both wild type and <unk> mutation positive population consistent with the company's commercial focused messaging and our prescribing information.

Following the recent changes in the marketplace tab Zurich is now the only oral treatment alternative approved third line plus setting <unk> lapsed refractory FL patients and based on physician reported prescribing behavior from our tracking studies position.

Physicians, we sampled reported they intend to increase prescribing it has patients in both wild type and.

DHT mutations and the third line plus setting.

<unk> recently updated its guidelines in B cell lymphomas.

The updated guidelines for <unk> <unk> Follicular lymphoma now include Tazemetostat as a suggested second line treatment regimen NFL for elderly patients.

Patients with <unk>, two wallpaper unrelenting relapse refractory disease with no satisfactory alternative treatment option.

Cosmetics that remains a suggested treatment in the third line FL and subsequent lines of therapy consistent with our label.

The inclusion of Tazemetostat in the second line setting is an exciting update that reinforces our confidence in <unk> potential to reach many more patients.

In addition to the end CCN guidelines update we're also witnessing the FL treatment landscape changing in real time with a voluntary withdrawal of <unk> inhibitors from the relapsed refractory upheld marketplace at least recent months.

In December secure a bio announced was withdrawn compete trip some of its approved indication.

This was followed by Gilead decision in January of this year that would drive right Delek permits approved desktop application.

TG Therapeutics decision in April to stop selling Uchronic and all of its approved indications.

The FDA has also looking closely at the risk benefit profile of <unk> inhibitors NFL.

With the recent OPEC meeting.

On the topic in which the FDA basket sizes to specifically discuss the observed toxicity of the PSV class and whether randomized data in this class of therapies are warranted to support the evaluation of benefit risk in patients with hematologic malignancies.

Our internal market research has consistently shown that the PFS recap play Pete <unk> Kras accounts for approximately one third of the market share.

For physicians.

And alternatives.

<unk> has very good now the only other oral therapy approved in the third line plus setting.

Combined with the MCC and guidelines update we believe this presents a significant opportunity for future prescription growth and corresponding commercial sales.

At this time I would now like to turn the call over to Chicago Chicago.

Thank you, Greg and good morning, everyone.

Begin our clinical update for Tazemetostat.

As shared on March <unk>, we dosed, our first patient in the phase II portion of the Symphony. One study are constantly do study assessing tazemetostat in combination with Rituximab, plus lenalidomide compared with Oscar plus placebo in patients with relapsed refractory Follicular lymphoma.

Previously treated with at least one systemic therapy, including those related to factory and have experienced progression of disease within two years of receiving the last treatment.

We are proud to share that the randomized phase two portion of the studies open globally, and we are actively screening and enrolling patients in both Europe and the U S. We are happy to share the data from the <unk>. One study has been accepted for poster presentation at the upcoming American Society of clinical oncology annual meeting in Chicago in June the <unk>.

Include updated safety and activity data from the phase one portion of the study.

Typically updated overall and complete response rate and a subgroup analysis of Rituximab refractory and 424 patients.

As you know represent about 30% to 40% of the relapsed refractory population and the REO, Glenn and enriched new more effective treatments are needed as a reminder, recent safety and activity data from the FASB phase one portion of Symphony one.

And at Ash in December 2021.

We continue to follow this cohort of 40 patients and report additional updated data from the phase <unk> portion of the study later this year.

We have finalized plans to begin a natural history study called Viola evaluating <unk> in second line relapsed refractory FL patients given the lack of the real world data evaluating <unk> outcomes and the second line relapsed refractory population, which includes cetuximab refractory and 424 patients. Our goal is to design a perspective.

<unk> natural history study to better understand the outcome so far square usage in this patient population.

The study is designed to create a synthetic control arm with us to compare the outcomes to the symphony one phase one b activity data in a matched patient population, which may allow us to mimic a randomized study.

Our goal is to submit data from this study for publication in a peer reviewed journal in 2023.

Turning to the Liza study progress is being made towards complete enrollment Jennifer has fully enrolled and is near complete and the DLP CLR.

This is a large phase two study evaluating R chop and Tazemetostat in 62 highest frontline FL patients and 122 highest frontline DLP cell patients Liza in collaboration with episodic anticipates presenting top line results from the phase two portion of the study in the second half of 2022.

Moving to our solid tumor program shallow one and open labeled randomized phase two study evaluating tazemetostat, but let's answer to Mike compared to anti <unk> monotherapy in metastatic castration discussed in cancer patients continues to progress nicely.

Studies, approximately 85% enrolled in the randomized portion towards the target of 80 patients in 2022, we expect to complete enrollment in the randomized phase two portion of the study and present updated data from the safety run in portion as well as interim data from the phase two portion of the study, including the logical PFS.

<unk> 50 in the second half of 2022.

Continue to screen patients in.

Otherwise known as <unk> hundred one the phase one reduce tazemetostat logical basket study as well as said one one which is first in human phase one <unk> study of ECM. All 414 episodes novel first in class oral <unk> inhibitor in adult patients with relapsed refractory multiple myeloma and <unk>.

That's in fact, the dnb scale.

Well either buy for the sake of the face on beta Hematological study will combine tazemetostat with muscle to Nevada, Roche's investigational <unk> T cell engaging bispecific antibody for patients with relapsed refractory FL, who have received two or more prior lines of therapy.

Four <unk> hundred one the company expects to enroll between 30% to 36 patients in the phase one dose escalation portion of the study.

We plan to provide updates on both of these programs in the second half of 2022 as you can see we continue to advance our development program for Tazemetostat and museum fortify and anticipate a steady cadence of data in the second half of this year and for the coming years.

Our post marketing commitments are also on track we plan to leverage the Symphony was consummated trial and the ongoing post marketing commitments to fully expand the <unk> label.

We have several post marketing studies underway intended to inform aspects of the label.

These include clinical pharmacology valuations to assess the effect of Tazemetostat on liver function and the effect of <unk> inhibitors and induces on tazemetostat for patient with solid our heme malignancies.

We've also expanded enrolment in a cohort of our phase two study in adults with INR, one negative tumor to enroll a total of at least 60 es patients.

The cohort is a paired biopsy designed to assess potential immune biomarkers finally, I would be remiss if I didn't share my excitement as a clinician in terms of the recent update to the <unk> guidance that Gracia referenced previously these changes which are more closely aligned with the current label in an absolute fact, CFO with support division.

Making informed decisions as it considers appropriate treatment options for the patients regardless of mutation status and relapsed refractory FL.

This time I'd like to pass the call to Joe <unk>, Senior Vice President and head of finance.

Thank you <unk>, we ended the first quarter with approximately $200 million in cash cash equivalents in marketable securities. We continue to guide our cash runway into the third quarter of 2023.

Total GAAP operating expenses were approximately $60 million for the first quarter of 2022.

non-GAAP adjusted operating expenses were approximately $53 million for the first quarter of 2022 as you may recall last quarter, we revised our full year 2022 operating expense guidance based on expense reduction measures and operational efficiencies. We continue to expect 2022 12 total non-GAAP adjusted operating expenses of between $1 62.

$80 million.

I would now like to turn the call back to grant for closing remarks, great.

Thank you Joe and thank you should probably this was.

Very good update and I look forward to questions in the Q&A session, we'll be joined by obviously by John should probably but also Joe corn, our new Chief operating officer, So I'll serve as kind of the AMC and as we open the line to questions.

I'll turn to the appropriate person okay. So why don't we open the line right now.

Thank you Sir as a reminder to ask a question you would need to press star one on your telephone to withdraw.

Your question press the pound key.

Please standby, while we compile the Q&A roster.

I show our first question comes from the line of Peter Lawson from Barclays.

Great. Thank you so much thanks for taking the questions.

I guess the first question as to the confidence you have around.

Essentially a rebound.

In revenues for Q2.

Any details around that would be great. Thank you.

Peter We're one month in and we haven't reported on that we did see a very strong rebound as I said in March that continued into April .

The court has said that.

I think that the broader scope of changes this is.

Theres been more change in this market in the last.

Quarter, I think that would probably have been in many many years and I think physicians are just processing that information.

And in terms of what the future holds us obviously.

Something that's difficult to predict what I can tell you is from what our market research has shown and what we.

We hear from physicians is this is a significant opportunity for test Baird there'll be patients that are put on other therapies as well.

For many patients, especially in the third line plus setting which is where the <unk> we use the most.

We're the only agent that is now approved in that setting and because of our profile not just being <unk> because of the safety profile because of the tolerability because of the efficacy quite frankly, what I'm. Most excited is the growth that we're projecting is not in the mutant population, it's actually in the wild type <unk>.

Loan population and so for those reasons, along with the MCC and guidelines.

Im quite encouraged I would say this is more of a back half and into 2023 when it starts because you've got to build patient and then.

The length of therapy component of that would kick in where that makes sense Peter.

Yes.

Actually my follow up question, so you're seeing that as more of a back half because of the.

Youre waiting for patients to come off the peak.

<unk>.

Yes.

Remember most of so if you take with exceptionally incurred all of these drugs will remain available on the market and I would like to ask your colleague here, but I can tell you my experience from working with physicians for many years at U S. Oncology, if you've got a patient that is doing well.

It's generally.

Is that an immediate change, especially if the drugs are still available, but I think each clinicians probably weighing the changes and as things like NCC and guidelines get pulled through pathways get updated all of those various types of things.

It pulls through the system, but youre finally, you're absolutely right and I think the as you know silicon lymphoma, indolent chiller and patients actually do well, so and if the patient is not symptomatic physicians tend not to change the therapy.

For example on <unk> any other therapy I think important to see Peter is that.

That point that grants made that will be the only approved therapy in third line and beyond and now are advances and update Ava.

Availability in second line as well, although it was our label back now in line with the levels. We believe there is great potential for Tesoro and Additionally, as as we've talked about all the great trials that we're doing in additional data that we will be generating not only NFL, but also in other heme malignancies and solid tumors really substantially add to the value of test in term.

Potential of Tasmanian combinations as well.

Thank you.

Thank you and just a final question on the weakness at the beginning of the.

Is there any way of breaking out any COVID-19 effect you may have seen.

First few months of the year.

Like all of the things Peter short answer is I can't really quantify that.

There were portions of the company.

Country before that we're enrolling.

Lockdowns and so forth, but I would say that my experience in other drug classes as well as what we saw last year is I think this relates to two factors one is.

The design of the Medicare drug benefit, which as you know as you get to the end of the year and the re upping the donut hole on all of these things that effect.

<unk> prescriptions were dispensed towards the end of the year and the second aspect is that given that the <unk> tumor.

A lot of patients to be honest with you decide to travel south or they do different things that impact the refills and and so forth. So I can't tease out everything but those are the and since we've seen similarly last year ive seen it in other classes not all of the world. That's what I think it was.

Predominantly I can't rule out that there was a COVID-19 effect.

Okay. Thank you so much.

Thanks Peter.

Thank you I show. Our next question comes from the line of Peyton von <unk> from Cowen. Please go ahead.

Hey, Good morning, guys. This is taken on for Joe Thanks for taking our questions I guess.

The first one.

Hey.

Could you elaborate or provide any additional details on the prescriber base for <unk> and how thats evolved since launch specifically what are the number of new prescribers for <unk> repeat prescribers and how that's changed over time and then also any additional information on the number of hospital integrating temp Ericsson to be earmarked or you can give and I have a follow up thank you.

Okay. So.

Let me just talk a little bit about how.

<unk> introduced the maybe you can comment on that.

We're here and that was on the board.

Predominantly in the start given our patient population, which was <unk> to begin with epithelioid sarcoma.

The fact that.

Familiarity with Hasbrouck was not.

<unk> distributed in the United States when it launched it was predominantly taken up in the academic setting and what we've seen is a migration and greater uptake in the community.

Over time, but today roughly the split of volume between the community and the.

Academic setting is roughly 45% to 50% community and the balance in the academic environment and it goes up and down.

And that environment. Most there is probably more patients in the community than there is in the academic environment, but you have greater.

Concentrations of physicians that all they do is treat follicular lymphoma in the academic environment than in the community. So so.

You get some different dynamics going on in that environment.

In terms of growth.

Prescribers, that's something that we have a really difficult time assessing because as you know.

60% of our volume goes through the specialty distributor channel. This is it.

If they order through the specialty pharmacy of which we've got one we understand it's doctor Smith and at the patient.

So that's how we can track that but that's only 40% of our prescription volume when it when drug is sent from the distributor to memorial Sloan Kettering are sent to.

Minnesota oncology, we can't tell from once that drug is dispense from the pharmacy, whether it's a new patient refill, which doctors so forth. So we don't have visibility with that what I will tell you.

We are continuing to see growth in.

New accounts coming onboard many times. These are satellite accounts of our parent account that has already ordered in the past. However, recently, we did see some accounts that had never ordered.

And and we can be for sure because I don't have direct access into those accounts, but this timing was coincident with a lot of the issues around the <unk>.

And some of the challenges that had so one could speculate that it might be related to that but I view that as a positive sign. So I think physicians are rethinking how to position <unk>, especially in light of the <unk> guideline changes are changed commercial strategy.

In terms of simplifying the message and really focusing on the broad population and expanding our use in the wild type setting. So I think I think those changes are having an impact did that answer your question.

Yes. Thank you that was really helpful. Thanks for all the color on that and then I guess secondly.

Due to the recent PRL issued to estimate due to the.

The FDA objective clinical trial data generated in China, and the U S studies.

Does this have any read through to enrolment in the phase II portion of the study.

Or any planned combination studies with Tazemetostat asset thank.

Thank you.

I think.

I really think it is a big thing would be I think is really although there is a discussion about China, but I don't think that specifically to China I think there's still a question about the.

It is overall.

Overall for simply one design as you know we have 180 sites globally right. Our focus is to really get patients in the U S and many other sites in Europe .

China as you know with that partner would be up 20%.

In terms of sharing completions, but thats not just at 20%. We our goal is to enroll the study as quickly as possible globally and currently they are looking to open the sites we have currently screening.

Early patients globally as well, so although I do see.

Kind of understanding your question Alexia, but I don't see an impact on symphony one because we do have many sites that can be able to enroll in this trial.

Alright, perfect. Thank you very much.

Thank you David.

I show. Our next question comes from the line of Michael Yee from Jefferies. Please go ahead.

Hey, Mike.

Hi, This is Sid on for Michael Yee.

Congrats on getting into the <unk> guidelines.

Q1 revenues I just have a few questions. If time allots. My first question revolves around this asset.

<unk> inhibitor, you said that we can expect data sometime second half could.

Could you give us any more guidelines as to can be expected to ash and what kind of data, we're expecting to see and what do you expect to see as a good result.

Yeah. So as you know the subject to easy I'm all for one four is the first clinical study two inhibitor and we are very excited about that.

As such in terms of <unk>.

Phase one trials first in human trial, we are doing dose escalation for six dose levels and the goal is to escalate and really get into them and Maxim efficacious delivered at MTV.

Screening patients. We are you know if we have sites open and in terms of the data because its open label dose escalation, we will be presenting data not just at certain time, but any time as we can.

Eventually I think the important thing is that specifically said beta inhibitor is very important for the people 14 translocation multiple myeloma and Thats, a big unmet need so our goal is to enrich for that patient in first in human and as a result.

Not only doing that but also 90 for 14 and be able to share that as a first in human design of the trial, but once we have a dose that we would expand it to add additional patients at that dose and eventually have cohorts that are specifically 44 14 about 20 patients 90 for 14 and then the LPC out in terms of what is what is <unk>.

I would say are in I would really think theres an opportunity in Q4 14, multiple myeloma, because there's a big unmet need and we know that as we've heard a therapist on what goes in that particular subset of patients and the prognosis is poor. So there is an opportunity to study monotherapy in that population and possibly a registration path now we do have to discuss with the agency.

Pat as well, but we are our goal is to enroll that trial as quickly as possible to get that data, possibly second half of this year and as we progress we will provide more guidance on when we'll be able to present that data, but eventually first in human open label as we get data biomarker data activities safety, we will be presenting.

Thank you for that.

And the second question I had revolves kind of just overall commercial strategy, we've seen kind of modest.

Quarter on quarter growth.

<unk>.

What's kind of your commercial strategy moving forward is it dependent on easy HG screening status with physicians is it a market access strategy. What are you trying to focus on too.

Rate increases and year on a quarter on quarter revenue.

So great question and I'm glad you asked.

It's really pretty straightforward, we don't have access issues.

From a payer standpoint.

There continue to be challenges just in terms of nature of how oncology has evolved in terms of access to providers that busy.

And quite frankly in some areas they kind of like the fact that they want.

In a COVID-19 environment and they are not opening up but I would say the vast majority of cases.

Offices are opening up we're getting access, but we're meeting physicians.

And engaging with other caregivers on their own.

In terms of what they prefer to do that electronically, we can do that but in terms of the strategy, it's really pretty straightforward. We're simplifying our message we're focusing on the broad patient population.

We are appropriately leveraging the changes in the marketplace as well as the NCC and guidelines to continue to execute on our label, which as you know from launch was was not exactly the most intuitive.

In terms of understanding the full potential and its really then pulling that through from a systems of care standpoint into the order sets into the pathways driving it through education driving it through physician interactions so I wish.

I could.

There were some secret sauce here. This is just about education I think that.

The resounding feedback, we get from physicians zone, which a tenant advisory board here in Boston a couple of weekends negotiate probably was added with me along with many.

A number of other colleagues here.

Physicians are really just.

Believe it or not at this point in time, new physicians that have used has there is a fair amount or just appreciating the data the depth of the data how the drug performs the fact that patients can tolerate this.

The data behind the wild type not just the mutant population. So there is a lot of factors that have taken time I wish it had been faster but.

That's really where we're focused <unk>, yes, I think there is an important thing as you think about test sorry.

One of the things that.

It was a challenge initially the understanding of the in April and then of course Covid.

Switching to the patient physician now as Brad mentioned, that's not the challenge is just educating physicians of the importance of wild type data.

As we saw when we discuss with the agency and and talked about that it wasn't worth it is the durability of the same the PFS is the same so the difference in absolute response rate, however that maybe due to the patient population demographics as well. So the goal is to really educate physicians about that data understand the data could be used overall.

I didn't talk population, but the important thing is also as much data as we can in combination and that is what our focus is so we started with monotherapy, but we are moving towards combination that we have this great data with Symphony. One that is 40 patients data that as I mentioned in the script, we actually are going into a real world study to create synthetic control.

Then we will have shallow one solid tumor data, we have LIFO data in frontline high risk patients and other combination as well so constant cadence of data to realize the value of <unk> not only as monotherapy, but also as combination. Although we understand we cannot promote that but we can talk clinically and medically about that data and I think that would vehicles.

And I'll just ask bill to comment on this and Im sorry, Thats a long answer one change we have made as you know we restructured the commercial organization.

We brought in new leadership.

Work them simplifying the message Theres been a lot of changes a new skill sets that understand systems of care. We've also <unk>.

Increase the size of our medical Affairs group and I'd Love to just touch on that briefly to talk a little bit about how that group is changing in light of the additional data that should finally mentioned too we think that there's a real opportunity and the need to educate in an appropriate way.

Based on all of this bill.

Thanks, Dan.

Yes, we think there's education is critical.

We've talked about this morning, a lot of the treatment of current in the community setting, but while that that treatment is occurring broadly in the community setting many individual community oncologists.

Only a small number of follicular lymphoma patients per year, and when you combine that with the indolent nature of the disease and the overall quantity of oncology development that come out annually keeping.

Keeping up with development can be challenging for some physicians.

Is incumbent on us to identify and reach those physicians. So we can ensure they are aware of all the changes in the marketplace.

And appropriately educated on updates to the NCC guidelines as well as our seismic data.

So we've put a lot more resources into that and making sure that we can go out and identify those.

<unk> position across the country.

And that's really the focus.

Our medical affairs team at this time.

Thank you Joe.

Thanks for that and that's something that worked in market access that can understand those challenges. If we have time just one last quick question.

Seems for the phase III portion of Symphony one much of the enrollment will be in China.

Due to the Lockdowns are you seeing any slowing down of enrollment and lastly, do you expect any milestone payments from Hutch Medford clinical developments in that phase III portion. Thank you, yes, let me just clarify actually it's on the contrary, we don't have patient expecting from China via a 180 sites.

Billy and only very handful of them would be in China. A majority of them are actually in Europe , <unk> about 75% to 80 sites hunting U S. So the goal was to really enroll the study across globally its not specifically in China.

As you know that about 500 patients. So we would we would.

U S sites, all ex U S site on China as well.

Youre absolutely right that has challenges in terms of.

Lockdown in China, and we are working with our partner <unk> to make sure that we can start those activities in China.

Overall, we are not dependent on just that we have all decided that we'd continue enrolling.

Across the across the world and yes related to the <unk>.

Bilestone payments there are milestone payments I don't believe we've disclosed what they are the amounts but.

They are some clinical milestone payments, but theres also some.

Important expense offset as you know simply ones for us.

It's a large randomized global trial. So there is a fair amount of expense there.

And as part of our agreement <unk> has agreed to pick up.

A portion of that for the patients that are enrolled in China. So that's not an insignificant amount of although that's not the majority of patients who should probably said and I just wanted to add to that does the symphony one phase III has opened its opened now in many sites in U S. Ex U S. We are screening patients and globally enrolling we are really working.

It's very hard to get this trial enrolled as quickly as possible.

Wonderful. Thank you for your time I appreciate it.

Thank you.

As a reminder to ask a question you would need to press star one on your Touchtone telephone. So was your question. Please press the pound key.

I'm showing no further questions in the queue at this time I would like to turn the call back to Mr. Grant Bogle CEO for closing remarks.

Thank you.

<unk>.

Very helpful and I want to thank everybody for joining us today.

We're available for follow up calls as needed I would also like to point out that we have revised and updated on our corporate debt, which is now on the website I would encourage you to download it and of course this meeting will be recorded as well and posted.

Shortly so with that I. Thank.

Thank you and I hope everybody has a great rest of the day.

This concludes today's conference call. Thank you for participating you may now disconnect.

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Hello, and welcome to <unk> first quarter 2020 financial results Conference call. At this time all participants are in a listen only mode. Following the prepared remarks, there will be a question and answer session. Please be advised that this call is being recorded.

Now I'd like to turn the call over to Kristen Hilton Investor Relations you may begin.

Thank you operator this morning, <unk> issued a press release, providing a business update in addition to first quarter 2022 financial results.

The press release can be found in the investors section of the Companys website at <unk> Dot com.

On the call today are grant Bogle, President and CEO , Dr. <unk> Agarwal, senior medical advisor and interim Chief Medical and development Officer, and Joe <unk> Senior Vice Senior Vice President and head of finance.

Gerald corn, our recently appointed Chief operating officer will join us for the Q&A session.

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 we 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 Grant.

Thank you, Chris and good morning, everyone. It's great to be here with you today and to provide an update on our first quarter 2022 results.

On today's call I will provide a commercial overview and performance. It has barrick should follow will speak to our clinical development progress for Tazemetostat in Louisiana.

Sure.

Destination I'll set the two inhibitor and Joe will cover our financials for the quarter. Following our remarks, we'll open the line for questions.

During the first quarter <unk> generated net product revenue of $8 $7 million, including $5 million related to the sale of <unk> commercial product for a third party pharmaceutical company use in clinical trials.

Their commercial net sales in the first quarter of 2022 were $8 1 million, representing an increase of approximately 10% when compared to the fourth quarter of 2021.

Pretty good from a patient assistance program represented approximately 15% of total demand for the first quarter of 2022, a rate consistent with Q1 of 2021.

Commercial demand increased 16% in Q1 2022 versus Q4 2021, while total demand, which as a reminder is commercial demand plus free goods provided through our patient assistance program.

Similar to the fourth quarter 2021 levels.

These fluctuations in total demand in commercial demand are directionally consistent with prescription dynamics, we saw at the end of 2020 and into 2021.

We believe these fluctuations a result in part of the Medicare part D drug benefit design and year end prescription patterns that impacted Q1 demand.

As in the prior year it has good demand.

<unk> rebounded in March and reached its highest monthly levels since launch.

While more time will be needed to understand the impact of seasonality in the relapse refractory FL market and has their demand in particular.

<unk> by this demand growth.

Recent market research suggests that has barrick market share continues to grow in the third line relapse refractory FL study for both wild type and easy HQ mutation positive population consistent with the company's commercial focused messaging and our prescribing information.

Following the recent changes in the marketplace tab Zurich is now the only oral treatment alternative approved third line plus setting for relapsed refractory <unk> patients and based on physician reported prescribing behavior from our tracking studies physicians.

Physicians, we sampled reported they intend to increase prescribing it has the patients in both wild type and.

DHT mutations and the third line plus setting.

<unk> recently updated its guidelines in B cell lymphomas.

The updated guidelines from day, one to silicone prevalent now include Tazemetostat as a suggested second line treatment regimen NFL for elderly or infirm patients with easy to wild type of umbrella relapse refractory disease with no satisfactory alternative treatment option.

Cosmetics that remains a suggested treatment in the third line FL and subsequent lines of therapy consistent with our label.

The inclusion of Tazemetostat in the second line setting is an exciting update that reinforces our confidence in <unk> potential to reach many more patients.

In addition to the NCC guidelines update we're also witnessing the FL treatment landscape changing in real time with a voluntary withdrawal of <unk>.

<unk> inhibitors from the relapsed refractory upheld marketplace in recent months.

In December secure a bio announced it was withdrawing compete drip from its approved ethanol indication.

This was followed by Gilead decision in January of this year that will drive right Delek permits approved FL indication.

TG Therapeutics decision in April was stopped selling mechanic and all of its approved indication.

The FDA has also looking closely at the risk benefit profile of <unk> inhibitors NFL.

With the recent <unk> meeting on the topic in which the FDA asks advisors to specifically discuss the observed toxicity of the <unk> class and whether randomized data in this class of therapies are warranted to support the evaluation of benefit risk in patients with hematologic malignancies.

Our internal market research has consistently shown that the <unk> III.

<unk> craft accounts for approximately one third of the market share.

For physicians seeking an.

In alternatives. The <unk> has very is now the only other oral therapy approved in third line plus setting.

Bind with the MCC and guidelines update we believe this presents a significant opportunity for future prescription growth and corresponding commercial sales.

At this time I would now like to turn the call over to ship Raleigh Chicago.

Thank you grant and good morning, everyone.

Begin our clinical updates with Tazemetostat.

As shared on March 15th we dosed, our first patient in the phase II portion of the Symphony One study.

So ladies study assessing tazemetostat in combination with Rituximab, plus lenalidomide compared with Oscar plus placebo in patients with relapsed refractory Follicular lymphoma, deviously treated with at least one systemic therapy, including those related to factory and have experienced progression of disease within two years of receiving.

The last treatment.

We are proud to share that the randomized phase II portion of the studies open globally, and we are actively screening and enrolling patients in both Europe and the U S. We are happy to share the data from the Symphony. One study has been accepted for poster presentation at the upcoming American Society of clinical oncology annual meeting in Chicago in June the <unk>.

Include updated safety and activity data from the phase one portion of the study specifically updated overall and complete response rate and a subgroup analysis of Rituximab refractory and 424 patients, which as you know represent about 30% to 40% of the relapsed refractory population in the real world and in.

Which new and more effective treatments are needed as a reminder, recent safety and activity data from the FASB phase one portion of Symphony, one but presented at Ash in December 2021.

We continue to follow this cohort of 40 patients and report additional updated data from the phase <unk> portion of the study later this year.

We have finalized plans to begin a natural history study called viola evaluating off grid in second line relapsed refractory FL patients given the lack of the real world data evaluating <unk> outcomes and the second line relapsed refractory population, which includes cetuximab refractory and 424 patients. Our goal is to design a perspective.

Natural history study to better understand the outcome so far square usage in this patient population.

Our goal is to submit data from this study for publication in a peer reviewed journal in 2023.

Turning to the Liza study progress is being made towards complete enrollment data has fully enrolled and is near complete and the DLP CLR.

As a reminder, this is a large phase two study evaluating R chop and Tazemetostat in 62 highest frontline FL patients and Huntington plenty to hydrous frontline Dlp's GL patients Liza in collaboration with <unk> anticipates presenting top line results from the phase two portion of the study in the second half of 2022.

Moving to our solid tumor program shallow one and open labeled randomized phase <unk> study evaluating tazemetostat, but let's answer to Mike compared to anti <unk> monotherapy in metastatic castration resistant prostate cancer patients continues to progress nicely. The studies approximately 85% enrolled in that.

Antibodies portion towards the target of 80 patients in 2022, we expect to complete enrollment in the randomized phase two portion of the study and present updated data from the safety run in portion as well as interim data from the phase II portion of the study, including the logical PFS and <unk> 50 in the.

<unk> half of 2022.

We continue to screen patients in area, otherwise known as <unk> hundred one the phase one reduce tazemetostat with logical basket study as well as said one one which is first in human phase one <unk> study of ECM. All 414 episodes novel first in class oral <unk> inhibitor in adult patient.

With relapsed refractory multiple myeloma and relapsed refractory <unk> and PCL.

For either the vice versa of the face on Vito Hematological study will combine tazemetostat with Mexico, Nevada, Roche's investigational <unk> T cell engaging bispecific antibody for patients with relapsed refractory FL, who have received two or more prior lines of therapy.

Four <unk> hundred one the company expects to enroll between 30% to 36 patients in the phase one dose escalation portion of the study with.

We plan to provide updates on both of these programs in the second half of 2022 as you can see we continue to advance our development program for Tazemetostat and ECM fortify and anticipate a steady cadence of data in the second half of this year and for the coming years.

Both marketing ft commitments are also on track we plan to leverage the Symphony was consummated trial and the ongoing post marketing commitment to fully expand the <unk> label.

We have several post marketing studies underway intended to inform aspects of the label.

We've also expanded enrolment in a cohort of our phase two study in adults with INR, one negative tumor general a total of at least 60 es patients.

The cohort is a paired biopsy design to assess potential immune biomarkers finally, I would be remiss, if I didn't share my excitement as a clinician in terms of the recent update to the <unk> guidance that Gracia referenced previously these changes which are more closely aligned with the current label in adaptive fact, CFO with support division.

Making informed decisions as it considers appropriate treatment options for the patients regardless of mutation status and relapsed or refractory FL.

This time I'd like to pass the call to Joe <unk>, Senior Vice President and head of finance.

We ended the first quarter with approximately $200 billion in cash cash equivalents in marketable securities. We continue to guide our cash runway into the third quarter of 2023.

Total GAAP operating expenses were approximately $60 million for the first quarter of 2022.

<unk> hundred $80 million.

I would now like to turn the call back to Greg for closing remarks, great.

Thank you Joe and thank you should probably this was.

Very good update and I look forward to questions in.

In the Q&A session, we'll be joined by obviously by John should probably but also Joe <unk>, our new Chief operating officer, So I'll serve as kind of the.

MMC and as we open the line to questions Dillon.

I'll turn to them to the appropriate person. Okay. So why don't we open the line right now.

Thank you Sir as a reminder to ask a question you would need to press star one on your telephone.

Your question press the pound key.

Please standby, while we compile the Q&A roster.

I show our first question comes from the line of Peter Lawson from Barclays.

Great. Thank you so much thanks for taking the questions.

I guess the first question as to the confidence you have around.

Essentially a rebound.

In revenues for Q2.

Any details around that would be great. Thank you.

Peter we're one month into it and we Havent reported on that we did see a very strong rebound as I said in March that continued into April .

But the corporate debt.

I think that the broader scope of changes this is.

Theres been more change in this market in the last.

A quarter I think that they probably have been in many many years.

And I think physicians are just processing that information.

And.

In terms of what the future holds thats obviously.

Something thats difficult to predict what I can tell you is from what our market research has shown and what.

We hear from physicians is this is a significant opportunity for <unk> will be patients that are put on other therapies as well, but for many patients, especially in the third line plus setting which is where the <unk> we use the most.

We're the only oral agent that is now approved in that setting and because of our profile not just being overall because of the safety profile because of the tolerability because of the efficacy quite frankly, what I'm. Most excited is the growth that we're projecting is not in the mutant population, it's actually in the wild type <unk>.

Population and so for those reasons along with the <unk> guidelines.

I'm quite encouraged I would say this is more of a back half and into 2023 when it starts because you've got to build patient and then.

Demand for therapy component of that would kick in if that makes sense Peter.

Yes.

Actually my follow up question, so you're seeing that as more of a back half because if you wait for patients to <unk>.

<unk>.

Remember most of so if you take with exceptionally incurred all of these drugs will remain available on the market and I would like to ask you is solid here, but I can tell you my experience from working with physicians for many years at U S. Oncology, if you've got a patient that is doing well.

It's generally.

There's not an immediate change, especially if the drugs are still available, but I think each clinicians probably weighing the changes and as things like MCC and guidelines get pulled through pathways get updated all of those various types of things.

Pull through the system, but youre finally, you're absolutely right I think the as you know follicular lymphoma, indolent chiller and patients actually do well so and if the patient is not symptomatic physicians tend not to change the therapy. If the container for example on <unk> or any of the therapy I think important to see Peter.

Is that.

At that point that Greg made that will be the only approved therapy in third line and beyond and now with answers and update availability in second line as well, although it was our label, but now in line with the levels. We believe there is great potential for <unk> and Additionally, as as we've talked about all the great trial that we're doing in additional data that we will begin.

<unk> not only NFL.

Also in other heme malignancies, and solid tumors really substantially add to the value of <unk> in terms of potential of cosmetic <unk> combinations as well.

Okay. Thank you and just final question on that.

Weakness at the beginning of the year is there any way of breaking out any COVID-19 overcrowded effect you may have seen.

First first few months of the year.

Yes.

Like all of the things Peter short answer is I can't really quantify that.

There were portions of the company.

Country before that we're enrolling.

Downs, and so forth, but I would say that my experience in other drug classes as well as what we saw last year as I really think this relates to two factors one is.

The design of the Medicare drug benefit, which as you know as you get to the end of the year and the re upping and Mcdonough hurdle on all of these things that effect.

How prescriptions are dispensed towards the end of the year and the second aspect is that given that the similar to the tumor.

A lot of patients to be honest with you decide to travel south or they do different things that impact the refills in.

And so forth so I can't tease out everything, but those are the and since we've seen similarly last year ive seen it in other classes not all of the world. That's what I think it was predominantly I can't rule out that there was a COVID-19 effect.

Okay. Thank you so much.

Thanks Peter.

Thank you I show. Our next question comes from the line of patent box back from Cowen. Please go ahead.

Hey, Good morning, guys. This is taken on for Joe Thanks for taking our questions I guess.

First one.

It.

Could you elaborate or provide any additional details on the prescriber base for <unk> and how thats evolved since launch.

What are the number of new prescribers, just repeat prescribers and how that's changed over time and then also any additional information on the number of hospital integrating temporary.

Mark are you can give.

Thank you.

Okay. So let me just talk a little bit about how was introduced maybe should probably you can comment on that.

We're here and I was on the board but.

Predominantly in at the start given our patient population, which was <unk> to begin.

Sarcoma, plus the fact that.

Familiarity with Hasbrouck was not.

Broadly distributed in the United States on Alliance. It was predominantly taken up in the academic setting and what we've seen is a migration and greater uptake in the community.

Over time and today roughly the split of volume between the community and the.

Academic setting is roughly 45% to 50% community and the balance in the academic environment and it goes up and down.

In that environment. Most there is probably more patients in the community than there is in the academic.

<unk> environment, but you have greater concentrations of positions that all they do is treat follicular lymphoma in the academic environment than in the community. So so you get you get some different dynamics going on in that environment in terms of growth.

Prescribers, that's something that we have a really difficult time assessing because as you know.

60% of our volume goes through the specialty distributor channel. This is <expletive>.

They order through the specialty pharmacy, which we've got one we understand it's doctor Smith and at the patient.

It's either <unk> or <unk>, we can track that but that's only 40% of our prescription Brian when drug is sent from a distributor to memorial Sloan Kettering are sent to.

We are continuing to see growth in <unk>.

New accounts.

<unk> onboard many times. These are satellite accounts of our parent account that has already ordered in the past. However, recently, we did see some accounts that had never ordered.

And and we cant be for sure because I don't have direct access into those accounts, but this timing was coincident with a lot of the issues around the <unk> and.

And some of the challenges that had so one could speculate that it might be related to that but I view that as a positive sign. So I think physicians are rethinking how to position to ask Barrick, especially in light of the <unk> guideline changes are changed commercial strategy.

Thank you that was really helpful. Thanks for all the color on that and then I guess secondly.

Due to the recent PRL issued Josh.

The FDA rejecting clinical trial data generated in China, and the U S.

Does this have any read through to enrolment in the phase II portion of the study.

Or any planned combination studies with Tazemetostat asset. Thank you.

I think IRA.

I really think it is a big thing would be I think is really although there is a discussion about China, but I don't think that specifically to China I think there's still a question about.

<unk> overall overall.

Overall for simply one design as you know we have 180 sites globally right. Our focus is to really get patients in the U S and many other sites in Europe , China as you know with our partner we have 20%.

In terms of sharing of accretions, but thats not just at 20%. We our goal is to enroll the study as quickly as possible globally and currently we are working to open the site. We are currently screening.

Patients globally as well, so although I do see.

I kind of understand your question Alexia, but I don't see an impact on symphony one because we do have many sites that can be able to enroll this trial.

Alright, perfect. Thank you very much.

Thanks, David.

I show. Our next question comes from the line of Michael <unk> from Jefferies. Please go ahead.

Hey, Mike Hey, good morning.

Hi, This is Sid on for Michael Yee.

Regrets on getting into new Mtc and guidelines Q.

Q1 revenues I just have a few questions on this time of what's my first question revolves around that yet.

<unk> inhibitor, you said that we can expect data sometime second half could.

Could you give us any more guidelines as to can be expected to ash and what kind of data, we're expecting to see and what do you expect to see as a good result.

Yeah. So as you know the said it too easy I'm all for one four is the first clinical statutory inhibitor and we are very excited about that.

As such in terms of.

Phase one trial is first in human trial, we're doing dose escalation for six dose levels and the goal is to escalate and really get into them and Maxim efficacious delivered at MTV.

We are screening patients. We are you know if we have sites open and in terms of the data because its open label dose escalation will be presenting data not just at certain time, but any time as we can.

Eventually I think the important thing is that specifically said beta inhibitor is very important Florida for 14 translocation multiple myeloma and Thats, a big unmet need so our goal is to enrich for that patient in first in human and as a result.

Not only doing that but also 90 414 <unk>. That's our first in human design of the trial, but once we have a dose that we would expand this add additional patients at that dose and eventually have cohorts that are specifically 44 14 about 20 patients 90 for 14 and then the LPC out in terms of what is what is <unk>.

I would say a win I would really think there is an opportunity in Q4 14 multiple myeloma, because there's a big unmet need and we know that as we've heard a therapist on what growth in that particular subset of patients and the prognosis is poor. So there is an opportunity to study monotherapy in that population and possibly a registration card now we do have to discuss with the agency.

About the Pat as well, but we are our goal is to enroll that trial as quickly as possible to get that data in a possibly second half of this year and as we progress we will provide more guidance on when we'll be able to present that data, but eventually first in human open label as we get data biomarker data activities safety, we will be presenting.

Thank you for that and the SEC.

Question I had revolves kind of just overall commercial strategy, we've seen kind of modest.

Order on quarter growth.

What's kind of your commercial strategy moving forward is it dependent on <unk> screening status with physicians is it a market access strategy. What are you trying to focus on to generate increases in year on quarter on quarter revenue.

So great question and I'm glad you asked that it's really pretty straightforward, we don't have access issues.

The payer's standpoint.

There continue to be challenges just in terms of nature of how oncology has evolved in terms of access to providers I mean are busy.

And quite frankly in some areas they kind of like the fact that they locked.

In a COVID-19 environment and they are not opening up but I would say the vast majority of cases.

Offices are opening up we're getting access, but we're meeting physicians in.

And engaging with other caregivers on.

The loan terms and if they prefer to do that electronically we can do that but in terms of the strategy, it's really pretty straightforward. We're simplifying our message we're focusing on the broad patient population.

We are appropriately leveraging the changes in the marketplace as well as the NCC and guidelines to continue to educate on our label, which as you know from launch was was not exactly the most intuitive.

Turns of understanding the probe potential and it's really then pulling that through from a systems of care standpoint into the order sets into the pathways driving it through education driving it through physician interactions so I wish.

I could.

There were some secret sauce here. This is just about education I think that.

The resounding feedback we get from physicians and we just had an advisory board here in Boston a couple of weekends negotiate priority was added with me along with normal.

A number of other colleagues here.

Physicians are really just.

The data behind the wild type not just the mutant population. So theres a lot of factors that have taken time I wish it had been faster.

But thats really the focus ship Ali Yes, I think there is an important thing as you think about task.

One of the things that.

It was a challenge initially the understanding of the label and then of course Covid just.

Switching to the patient physician now as Brad mentioned, that's not the challenge is just educating physicians of the importance of wild type data.

As we saw when we discuss with the agency and and talked about that it works and bolt. It is the durability of the same the PFS is the same as the difference in absolute response rate. However that maybe due to the patient population demographics as well. So the goal is to really educate physicians about that data understand the data so it could be used overall.

Doc population, but the important thing is also as much data as we can in combination and that that is what our focus is so we started with monotherapy, but we are moving towards combination that we have this great data with Symphony. One that is 40 patients data that as I mentioned in the script, we actually going to do a real world study to create synthetic control.

Then we will have shallow one solid tumor data, we have lifestyle data in frontline high risk patients and other combination as well so constant cadence of data to realize the value of <unk> not only as monotherapy, but also as combination. Although we understand we cannot promote that but we can talk clinically and medically about that data and I think that would vehicles and one in August .

As Farrell to comment on this and I'm sorry, just the one answer one change we have made as you know we restructure of the commercial organization.

We brought in new leadership.

Work them simplifying the message Theres been a lot of changes there new skill sets that understand systems of care. We've also incur.

We increased the size of our medical Affairs group and I'd like to just touch on that briefly to talk a little bit about how that group is changing in light of the additional data that should finally mentioned too we think that there's a real opportunity and the need to educate in an appropriate way.

Based on all of those David Joe.

Thanks, Dan.

Yes, we think there's education is critical.

We've talked about this morning, a lot of the treatment occurs in the community setting, but while that that treatment is occurring broadly in the community setting many individual community oncologists.

Only a small number of follicular lymphoma patients per year, and when you combine that with the England nature of the disease and the overall quantity of oncology developments that come out annually.

Up with development can be challenging for some physicians.

So it's incumbent on us to identify and research physicians. So we can ensure they are aware of all the changes in the marketplace.

And appropriately educated on updates to the NCC guidelines.

As well as our diverse data.

So we've put a lot more resources into that and making sure that we can go out and identify those.

Community physicians across the country.

That's really the focus of our medical affairs team at this time.

Thank you Jeff.

Thanks for that somebody that worked in market access that can understand those challenges. If we have time just one last quick question. It seems for the phase III portion of Symphony one much the enrollment will be in China.

Due to the Lockdowns are you seeing any slowing down of enrollment and.

Lastly.

Or you expect any milestone payments from <unk> for our clinical developments and that phase III portion.

Yes, let me just clarify actually it's on the contrary, we don't have a patient expecting from China via a 180 sites globally and only a very handful of them would be in China. A majority of them are actually in Europe , <unk> about 75% to 80 sites in U S. So the goal was to really enroll the study across globally, it's not.

Pacifically in China.

As you know that about 500 patients so we would.

We use U S sites, all ex U S site on Chinas Youre, absolutely right that has challenges in terms of.

Lockdown in China, and we are working with our partner <unk> to make sure that we can start those activities in China.

Overall, we are not dependent on just that we have all these site that would contain rolling.

Across the across the world.

And yes related to the.

Milestone payments there are milestone payments I don't believe we've disclosed what they are the amounts but.

They are some clinical milestone payments, but theres also some.

Important expense offsets as you know simply ones for us.

With a large randomized global trial. So there is.

Fair amount of expense there.

And as part of our agreement <unk> has agreed to pick up.

A good portion of that for the patients that are enrolled in China. So that's not an insignificant amount of although that's not the majority of patients. This should probably said and I just wanted to add to that does the symphony one phase III has opened its open now in many sites in U S. Ex U S. We are screening patients and globally enrolling we are really working.

It's very hard to get this trial enrolled as quickly as possible.

Wonderful. Thank you for your time I appreciate it.

Thank you.

As a reminder to ask a question you would need to press star one on your Touchtone telephone to withdraw your question. Please press the pound key.

I'm showing no further questions in the queue at this time I would like to turn the call back to Mr. Grant Bogle CEO for closing remarks.

Thank you Mrs.

Very helpful and I want to thank everybody for joining us today.

We're available for follow up calls as needed I would also like to point out that we have revised and updated our corporate debt, which is now on the website and encourage you to download it and of course this meeting will be recorded as well and posted.

Shortly so with that I. Thank you.

Hope everybody has a great rest of the day.

This concludes today's conference call. Thank you for participating you may now disconnect.

Q1 2022 Epizyme Inc Earnings Call

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