Mar 6, 2014
Executives
Stephanie Ascher - Stern Investor Relations David Schenkein - Chief Executive Officer Scott Biller - Chief Scientific Officer Duncan Higgons - Chief Operating Officer Glenn Goddard - Senior Vice President, Finance
Analysts
Anupam Rama - J.P. Morgan Gena Wang -Leerink Partners Nicholas Bishop - Cowen & Company Howard Liang - Leerink Partners Joe Aguilera - BioRevolution Capital
Operator
Good morning. And welcome to the Agios Fourth Quarter and Year End 2013 Conference Call.
At this time, all participants are in a listen-only mode. There will be a question-and-answer session at the end.
Please be advised that this call is being recorded at Agios’ request. I would now like to turn the call over to Agios.
Please proceed.
Stephanie Ascher
Hello. This is Stephanie Ascher with Stern Investor Relations.
And welcome to Agios’ fourth quarter and year end 2013 conference call. You can listen to our live webcast or a replay of today’s call by going to the Investors section of the website agios.com.
The agenda for today’s call is, David Schenkein, CEO, will discuss highlights of the fourth quarter and recent business and clinical pipeline updates; Scott Biller, CSO will provide an update on the company’s R&D efforts; Duncan Higgons, COO will provide updates on our partnership with Celgene; and Glenn Goddard, SVP Finance will review the company’s financial results. He will then make closing remarks and open the call for Q&A.
Before we begin, I would like to remind you that today’s discussion will include statements about the company’s future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent quarterly report on Form 10-Q, which in on file with the SEC.
In addition, any forward-looking statements represents our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change.
Therefore you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. Now, I will turn the call over to Agios’s CEO, David Schenkein.
David Schenkein
Thanks, Stephanie, and good morning, everybody. Today we’ll be providing important updates on our programs in both cancer metabolism and the inborn errors of metabolism or IEMs.
2013 was an important year for Agios, as we successfully filed two INDs, completed IND activities for our third program and started our first clinical trial, all with novel first-in class therapeutic candidates. Our research programs continue to make excellent progress in new areas of biology.
We continue to focus on hiring great people and create an exciting culture that encourages our employees to push the frontiers of science and medicine, all in our efforts to realize our long-term vision of developing medicines that will be transformational for patients and also building a great multi-product biopharmaceutical company. As you know, in the area of dysregulated metabolism, we have two areas of focus, cancer metabolism and the inborn errors.
We remained committed to using precision medicine in all our development, meaning that every molecule we bring into the clinic will had a -- will have a set of predictive biomarkers to identify the right patients and give us a higher probability of technical success, while allowing us to move more quickly and efficiently through clinical development, should they be safe and effective. Our three lead programs are progressing rapidly and remain on track.
IDH1 and IDH2 are two of the most promising targets in cancer biology today. Research led by Agios scientists validates our belief that these mutations are initiating and driving subsets of solid and hematological cancers via tumor production of the oncometabolite 2HG or 2-Hydroxyglutarate.
The enzymes are mutated in a wide range of cancers that in total affect over 40,000 patients in the major markets. Our drug candidates, AG-120 and AG-221 are potent against the mutated form of IDH1 and IDH2, respectively, and rapidly reduce the level of 2HG to the normal background level in both cell lines and animal models.
Both of these programs are part of our Celgene collaboration. We have demonstrated a wide therapeutic margin with both of our IDH candidates based on preclinical toxicology studies and back in December at the ASH Meeting we presented data featuring in vivo efficacy in acute myelogenous leukemia or AML for both candidates.
The results highlight the potential for our cancer metabolism therapeutics to provide significant clinical benefit to these genetically identified patient populations, where patients have limited or no therapeutic options. Today, we are updating on the timing for the first clinical data emerging from the ongoing Phase 1 study of AG-221 for the treatment of patients with hematologic malignancies with an IDH2 mutation.
The data will be presented at the upcoming AACR Annual Meeting in early April. We will not be providing any additional information until the meeting, but we can tell you in the meantime that enrollment and dose escalation continue.
As a reminder, this multicenter open-label Phase 1 study is designed to evaluate AG-221 in patients with advanced hematologic malignancies, including AML, MDS and the myeloproliferative disorders. The primary patient population in this trial is expected to relapse and/or refractory AML, approximately 15,000 adults are diagnosed each year in the U.S.
with AML and an IDH mutation occurs in approximately 15% of these patients. The study only enrolls patients who are IDH2 mutant positive.
In the first stage of the study, patients received ascending twice-daily oral doses of AG-221 in 28-day cycles. The primary endpoints are safety, pharmacokinetics and pharmacodynamics, primarily using the level of 2HG.
The secondary endpoint is determination of clinical activity. Once MTD has been reached we plan to initiate several expansion cohorts to further evaluate the safety, tolerability and clinical activity.
We expect these cohorts to begin enrolling in 2014 and they will give us more definitive safety and efficacy information in more homogeneous subsets of patients. Once MTD has been reached we will also consider initiating trials in IDH2 mutant positive solid tumors and combination trials.
We look forward to sharing the initial AG-221 clinical data with you next month. Let me now move to our IDH1 program where AG-120 is poised to enter Phase 1 clinical trials and then later, Scott, will review our third development program AG-348 for pyruvate kinase deficiency.
For our IDH1 program, the FDA recently accepted our IND application and we are on track to initiate two Phase 1 clinical trials early this year. AG-120 is an orally available, selective, potent inhibitor of the mutated IDH1 protein.
We recently elected to retain the U.S. development and commercialization rights for AG-120 under our agreement with Celgene, with Celgene, retaining its option to ex-U.S.
rights. Duncan will go into more detail on this shortly.
In addition to the hematologic cancers like acute leukemia, mutations in IDH1 have been identified in a significant number of patients with difficult to treat cancers, such as the gliomas, chondrosarcoma and cholangiocarcinoma with the treatment options limited and the prognosis for patients is poor. These provide an important opportunity for the rapid development of a targeted therapy like AG-120.
The Phase 1 trials for AG-120, one in advanced solid tumors and one in advance hematologic malignancies, will only enroll patients who carry an IDH1 mutation and will begin with the dose escalation phase followed by multiple expansion disease cohorts, once the MTD and Phase 2 dose have been established. Back in December, we announced that Celgene extended our cancer metabolism collaboration for an additional year.
Celgene has been a tremendous partner and we’re pleased to continue this collaboration with them. Turning briefly to our lead candidate in the IEMs, AG-348 is a potent oral activator of pyruvate kinase for the treatment of patients with pyruvate kinase deficiency.
We have completed IND-enabling studies for AG-348 and expect to initiate Phase 1 clinical trials in healthy volunteers in mid-2014. Scott will go into further detail about this program shortly.
Since we opened our labs five years ago, we have worked hard to build a robust multiproduct, first-in-class pipeline in a new and disruptive area of biology that we hope will lead to a series of important medicines for both patients with cancer and those with the rare genetic diseases of metabolism. In 2013, we also successfully completed our initial public offering, allowing us to end the year in a very strong financial position with the runway to drive all of our lead programs to meaningful clinical milestones and with a superb investors’ base.
We continue to hire great people and focus on building a culture that provides the environment for the discovery and development of breakthrough therapies. Looking ahead to the end of year, we expect to have all three of our lead programs in clinical development, all driven by patient-derived biomarkers.
As you can see we’re advancing these programs very quickly and efficiently. With that, I'll now turn the call over to Scott Biller, our Chief Scientific Officer.
Scott Biller
Thanks David. At Agios, we’re building a broad first-in-class portfolio of drug candidates in cancer metabolism and inborn errors of metabolism.
David reviewed with you our clinical programs of mutant IDH inhibitors, AG-221 and AG-120, and I’m going to spend some time reviewing our progress with AG-348, a therapy for pyruvate kinase deficiency, a severe neglected genetic disease of metabolism. As a result of our entire IEM portfolio, Agios has worldwide rights to AG-348.
AG-348 is designed to treat pyruvate kinase deficiency, a rare form of hemolytic anemia that is usually diagnosed in infancy and affects approximately 1000 to 3000 patients in the U.S. with the similar numbers ex-U.S.
This disease results from mutations in pyruvate kinase R also called PKR, an enzyme in glycolosis that provides energy in the form of ATP to the red blood cell. AG-348 is a potent, orally available small molecule activator of the mutated pyruvate kinase enzyme, a highly targeted therapeutic candidate for this debilitating disease.
We believe those are well-established clinical and regulatory pathway for AG-248 based on approved medicines developed for the treatment of other anemias. However, there are currently no available treatments for pyruvate kinase deficiency other than supportive care, which includes splenectomy, transfusion support and chelation therapy.
The preclinical data on AG-348 that we presented at ASH in December, support its efficacy in correcting the underlying metabolic region in PK deficient red blood cells. The results demonstrate that AG-348 potently activates a spectrum of pyruvate kinase mutant proteins and corrects the metabolic dysregulation in patient derived blood samples ex-vivo including the restoration of ATP levels.
These data support the hypothesis that drug intervention with AG-348 will restore glycolytic pathway flux and normalized red blood cell metabolism in humans. We have completed our IND-enabling studies for AG-348 and we remain on track to initiate clinical trials in mid-2014.
We will start Phase 1 trials in healthy volunteers with a single ascending dose escalation study followed by multiple ascending dose study. These will be randomized placebo-controlled trials at a single experienced U.S.
site. The primary endpoints will be safety, pharmacokinetics and pharmacodynamics.
The results from these studies will allow us to select the appropriate dose to move rapidly into a proof-of-concept study in patients with pyruvate kinase deficiency. Following our first three therapeutic candidates, we have a robust research portfolio in both cancer metabolism and the inborn errors of metabolism.
This portfolio is fueled by our continuing build in investment in platform technologies in cellular metabolism. We have successfully validated multiple novel targets both in oncology and the rare metabolic diseases, several which have moved into the drug discovery phase.
These programs are all first-in class innovative efforts that have been eliminated by deep scientific insight provided by Agios scientists. In addition, these programs all follow the precision in medicine paradigm and that we expect to have robust patient selection strategy with genomic and metabolic biomarkers prior to entering clinical trials.
Duncan Higgons, our COO, will not walk you through the specifics of our Celgene collaboration. Duncan?
Duncan Higgons
Thanks, Scott. As David as already mentioned in December of last year, Celgene extended our exclusive research collaboration in the area of cancer metabolism for an additional year.
The collaboration began in April 2010, and the discovery phase of this collaboration has now been extended through April 2015. This extension means that they continued to have the option to obtain exclusive rights for the further development and commercialization of certain programs and geographies under the collaboration while we retain rights to others.
They also have the option to extend the research collaboration for one additional year, potentially through April 2016. The development and commercialization of programs resulting from the collaboration fall into two categories.
The programs in the first category, Celgene can choose to license worldwide rights either upon IND acceptance or the end of Phase 1. Celgene will pay all development costs for these programs.
In addition to milestones and royalties, Agios can choose to participate in co-promotion activities in the U.S. with Celgene.
AG-221 falls into this first category. In the second category, we have the option to retain full rights to develop and commercialize medicines in the U.S.
For example, in the case of AG-120, we recently exercise the option for U.S. development and commercialization rights with Celgene retaining the option to ex-U.S.
rights. Agios and Celgene will equally share development costs for this program.
For all programs, Agios is eligible to receive up to $120 million in potential milestones as well as royalties on sales. Celgene has been a great partner on many different levels, and we are looking forward to the future success of this collaboration.
With that, I will turn you over to Glenn Goddard, our Senior Vice President of Finance.
Glenn Goddard
Thanks, Duncan. Agios is in a very strong financial position today.
We have a robust and efficient R&D plan, a successful cancer metabolism collaboration with Celgene. And we believe that we are well capitalized to drive our lead programs to meaningful clinical milestones.
As David mentioned, we are very pleased to have successfully completed our initial public offering in July last year, raising net proceeds of a $111 million. In addition, Celgene purchased $12.8 million through a concurrent private placement.
Moving to our financials, our cash, cash equivalents and investments as of December 31, 2013 were $93.9 million, compared to $128 million as of December 31, 2012. The increase was primarily driven by the proceeds from our IPO.
We expect that our current cash will fund operations at least unit the fourth quarter of 2016. Our collaboration revenue was $6.7 million in the fourth quarter of 2013, compared to $6.3 million in the fourth quarter of 2012.
Under our Celgene collaboration, we are recognizing revenue related to the upfront license fee and the October 2012 extension payment over a six-year period. In the second quarter of 2014, we expect to receive a $20 million extension payment from Celgene related to the extension of the research portion of the collaboration agreement.
Research and development expenses were $15.3 million in the fourth quarter of 2013, compared to $11.2 million in the fourth quarter of 2012. This increase was largely due to the increased spending on clinical activities for AG-221, along with IND-enabling activities for AG-120 and AG-348.
General and administration expenses were $3.7 million in the fourth quarter for 2013, compared to $1.6 million in the fourth quarter of 2012. This increase was largely related to the expense of supporting public company operations.
Looking ahead for the rest of 2014, we expect to announce key milestones from each of our three week programs during the year. For AG-221, we expect to present initial dose escalation data from our Phase 1 study at AACR in April.
We also expect to initiate expansion cohorts late in the year. For AG-120, we plan to initiate two Phase 1 clinical trials in early 2014, one in advanced solid tumors and one in advanced hematologic malignancies.
Both studies will only enroll patients that carry an IDH1 mutation. For AG-348, we anticipate initiating single and multiple ascending dose studies in healthy volunteers in mid-2014.
We will now open the call for Q&A. Operator?
Operator
Thank you. (Operator Instructions) Our first question comes from Geoff Meacham with J.P.
Morgan.
Anupam Rama - J.P. Morgan
Hey guys. This is Anupam Rama in for Geoff Meacham.
Thanks for taking our question. I just had a quick question on the AG-120 trial.
You mentioned a few indications that might be potentially used in that trial, but have you decided which exact indications are going to be used? And then also a quick follow-on, what are you learning about sort of IDH1 mutation and the prevalence in some of these indications?
I think there was a recent publication in Clinical Opinion of Gastroenterology that showed for cholangiocarcinoma that IDH mutations could be as high between 15% and 30% of the mutations for that disease? Thanks.
David Schenkein
Yes, thanks for your question. So I will answer both those questions.
This is David. I will start with the first one around the types of patients that we will focus on in the solid tumor trial for AG-120.
And so the way this trial has been designed is to allow any solid tumor malignancy that carries an IDH1 mutation into the trial. And we think that’s where oncology drug development should be going, focusing less on the histology of the tumor but more on the molecular driver of the cancer.
So in the dose escalation phase, patients with a variety of different malignancies will come into that trial to understand obviously safety pharmacokinetics, pharmacodynamics. And then once we get to an appropriate dose that we know affects the biomarker and is safe, then we’ll do disease specific cohorts and we’ll focus on the major diseases in which we know the IDH1 mutation occurs.
I had mentioned some of them like gliomas. cholangiocarcinoma, chondrosarcoma, T-cell lymphoma, but there are others as well.
We’ll make those final decisions as we get closer to that stage. With respect to your second question around, how do we think about refining the numbers?
We do know that the IDH1 and IDH2 mutations, we believe, are very important to drive the mutations in a wide range of both solid and liquid tumors. These numbers are going to continue to be refined over the next several years, as we and our collaborators do more and more research understanding how often these mutations occurs.
But the others, as you know, is that more and more patients are now having a tumor sequence at the time of diagnosis or relapse in the community and the academic setting. So I suspect over the next several years, we will see a refinement and probably see more diseases pop up that we’re not aware of today that carry these mutations.
Anupam Rama - J.P. Morgan
Great. Thanks for taking the question.
Operator
Our next question comes from Howard Liang with Leerink Partners.
Gena Wang -Leerink Partners
It’s Gena Wang dialing in for Howard. Thank you for taking my questions.
So my first question is on AG-221. I’m really glad to see that initial data will be represented at AACR, which is a big jump in timeline that was initially expected at ASH.
Should we assume that data mature quickly than initially expected? And if you see some promising activity before reaching the MTD, would you start expansion cohorts?
And then related question, since data will be mostly for AML patients, will AML expansion cohort be your main focus?
David Schenkein
Yes, thanks for those questions. This is David again.
So we really can’t say much about what will be presented at AACR, but it’s only a few weeks away until then, and obviously we’ll look forward to presenting the data and sharing with you at that time. But I can tell you as it will be the initial data from the Phase 1 dose escalation [report on the] in my original remarks, the dose escalation phase is continuing at this time.
With respect to the expansion cohorts, as we’ve always said in this first trial the patients are primarily those with relapse refractory AML, but there also could be patients with advanced myelodysplasia and the myeloproliferative diseases. And as we approach the MTD or the appropriate biologically relevant dose taken to the expansion cohorts, we will make a decision about exactly which subsets the patients in those three diseases that we’ll enroll.
And we certainly will lead everybody know when we initiate those expansion cohorts and give you some details about the types of patients. As I said on our remarks, we are on track as we’ve said before to initiate those expansion cohorts in 2014.
Gena Wang -Leerink Partners
Thank you.
Operator
(Operator Instructions) Our next question comes from Nicholas Bishop with Cowen & Company.
Nicholas Bishop - Cowen & Company
Hi, good morning. I got on a call little late so I apologize if you’ve already remarked on this.
But David, you kind of said in the past that you would only be reporting data from the 221 trial kind of when you had an understanding of a meaningful chunk of information if you will. So it would be helpful if you could give any kind of guidance about sort of what elements of the profile with 221 you would expect to be understood once this presentation at ACR is made?
David Schenkein
Yeah, thanks Nick. So I can tell you is we do think this is the right time to present the initial clinical data.
And I can’t really comment on any more details in that as I said we’re only a few weeks away but we do think it’s the right time to present the first data.
Nicholas Bishop - Cowen & Company
Okay. And then do you happen to know when the abstract will be available for this particular presentation?
David Schenkein
Yes. We will be sending out a release once we get all the information.
We have other likely presentations and posters at ACR. So we’ll send out a release well in advance of the meeting so that everybody knows where and when these presentations or the posters will occur.
Nicholas Bishop - Cowen & Company
Okay. Thanks a lot.
Operator
Our next question comes from Terence Flynn with Goldman Sachs.
Unidentified Analyst
Hi. This [Lee] in for Terence.
Thanks for taking our question. So, on 120, are you guys recently filed an IND and it was accepted.
Can you talk a little bit about the preclinical tox profile and whether in those studies you actually reached in MTD? Thanks.
David Schenkein
Yeah. Thanks for your question.
So we’re not really giving out a lot of detailed information about the tox program. What we have said is that we were obviously very pleased with the preclinical package that we have on these molecules not only their toxicology profile but their pharmacological properties.
And that we have a wide therapeutic margin above the dose that we know we need to lower the level of 2HG which is important in this disease. And obviously the FDA agreed with us and accepted the IND but we’re really not giving out a lot of details.
We will as we get further as we publish on the aspects of these molecules will provide that at a later date. But we're very pleased and ready to initiate these trials once they get through the IRBs at the sites.
Unidentified Analyst
And maybe on the expenses, how should we think about, is fourth quarter kind of a proxy we should use? And what are the kind of the components that are going into your cash guidance?
Thanks.
Glenn Goddard
Yeah. Sure.
This is Glenn, I’ll take that one. So as you look at the fourth quarter, I think that is a good representation as we move forward into 2014.
What we have been saying is the cash that we ended the year with will take us to the end of 2016. And we do expect to end 2014 with as least $130 million in cash.
So hope that gives you a good sense.
Unidentified Analyst
Thank you.
Operator
Our next question comes from Howard Liang with Leerink Partners.
Howard Liang - Leerink Partners
Hi, thank you for taking my follow-up. I have another on AG-348.
So just wondering what kind of preparation you need to do in order to file IND in the initial trial in mid-2014. And after the dose escalation study in healthy volunteer, what are the key characteristics of target candidates in terms of age and stage of disease that you are seeking to optimize?
David Schenkein
Yeah. So it’s a two part question there.
I’ll start with the second part, which are the patient characteristics. So, remember that the first trials that will initiate are in normal healthy volunteers not in patients.
And it will be a single ascending dose trial and a multiple ascending dose trial. Once we’ve looked at some of the data from that trial, understand safety, pharmacokinetics and pharmacodynamics, we’ll move as quickly as we can into a clinical trial in patients with pyruvate kinase deficiency.
We’ve not given out yet any real details on exactly which segment of patients will likely to enroll in that trial, other than it will be adults and not pediatric. And we certainly will give you more guidance and color on that at subsequent calls or meetings, once we have -- once we’re ready to share that.
With respect to what's left to do, again, we’re really pleased that we’ve completed all the IND activities. And we as an organization don’t announce when an IND has been filed and we will announce when the first patient gets enrolled.
And so it’s all the typical activities of processing through the FDA.
Howard Liang - Leerink Partners
Thank you. That's very helpful.
Operator
(Operator Instructions) Our next question comes from Joe Aguilera with BioRevolution Capital.
Joe Aguilera - BioRevolution Capital
Congratulations on the good work. Just question on AG-221, assuming we hope we see a signal in the AACR data?
What would be the plan for Phase 2, how many patients and how long would that trial take and what would some of the endpoints, if you can elaborate on that?
David Schenkein
Yeah. Thanks for your question.
This is David. What we have always said when we design our clinical program and AG-211 is a perfect example of this.
There are two important features. One is, as we have always said, only enrolling patients who carry the right genetic or metabolism based profiles.
So we really restricted the population to the patients who we think are more likely to have a clinical effect and so that's what we have done. The second is designing and early development program meaning this trial the Phase 1 and its expansion cohorts to give us all the information we need to know sort of at the end of this trial.
We know which way to go. Can we move into more definitive efficacy trials or we’re doing combination trials and so it’s a bit early to give you guidance on exactly what those subsequent trials look like until we fully reviewed this data and obviously presented it over a period of time.
But, again, these trials are designed to give us robust not only safety, pharmacokinetics, pharmacodynamics to look at efficacy, but also a lot of scientific underpinning, a lot of correlated science and all of that will give us the information we need to design the right clinical trials. It’s a bit early that we give any more color on exactly what those trials look like.
Joe Aguilera - BioRevolution Capital
Okay. Roughly, would they start either the AML or the MDS, Phase 2 in 2015, is that what you are looking at?
David Schenkein
Yeah. Good question.
Again, we are not giving out any guidance quite yet on that. We certainly will as we get closer to reviewing all the data presenting it, we will give a pretty detail view overtime, not right now around, when those trials if they are going to start, what they would look like and when they will start, et cetera.
We will give that. We have given out, historically, a very good glimpse of what our early development program is and when we are ready we will share the late development program as well.
Joe Aguilera - BioRevolution Capital
And in terms of AG-120, let’s see the Phase 1 gets through there, when would we look at the Phase 2 approximately to start there?
David Schenkein
Yeah. For AG-120 we have not given out yet any guidance on when to expect to see data from that trial.
We are going to wait like we have done with AG-221 until we initiate those trials and then we will guide on when to see that and like with 221 once we get through that Phase 1 trial or at least a fraction of it, we will then guide what later development timelines look like. I’ll remind you that our key milestones -- clinical milestones for 2014 of the AG-221 data at AACR, the initiation of the expansion cohorts in 2014 and the clinical starts for AG-120 and AG-348.
Joe Aguilera - BioRevolution Capital
And what would the main indications that you feel could be commercially available for AG-120, I am just looking ahead, what are the top two indications that you are going to target?
David Schenkein
So we look the science dictate exactly where we move, we think that's the most important way to make those decisions based on the quality of the signal we are seeing, as well as the need that patients have. It is a pretty clear that the diseases, the subsets of which carry an IDH1 mutation are very, very much in need of new therapies, whether its glioma, chondrosarcoma, cholangiocarcinoma, T-cell lymphoma and the hematologic malignancies.
At this point, we think they are all really important to explore and we plan to explore all of them, as well as some of the other solid tumor patients that carry the mutation. Once we understand both safety and a look at efficacy then we will make decisions on which one is to move.
But many of these are diseases that really have no standard of care available to them.
Operator
I’m showing no further questions at this time. I’d like to turn the conference back over to our host for closing remarks.
David Schenkein
I’d like to thank everybody for participating today, thanks to all your support in the past and in the future going forward and look forward to seeing you at future meetings. So thanks today.
Operator
Ladies and gentlemen that conclude today’s presentation. You may now disconnect and have a wonderful day.