Analyst Conference Summary

biotechnology

conference date: May 9, 2016 @ 5:00 AM Pacific Time
for quarter ending: March 31, 2016 (first quarter 2016, Q1)

Forward-looking statements

Overview: Epizyme is a clinical-stage oncology therapy company with a platform based on small molecule inhibitors of chromatin modifying proteins (CMPs). All revenue is from collaborations as therapy candidates are moved towards FDA approvals.

Basic data (GAAP):

Revenue was $0.5 million, down sequentially from $0.6 million, and down from $0.9 million in the year-earlier quarter.

Net loss was $22.9, down sequentially from a loss of $22.2 million, but up from a $61.3 million loss year-earlier.

EPS was negative $0.41, up sequentially from negative $0.53, and down from negative $1.75 year-earlier.

Guidance:

Conference Highlights:

Making progress on registration-enabling clinical trials of tazemetostat and expanding the program to more targets and in combination with other drugs. Will investigate tazemetostat in combination with RCHOP, with Phase 1 starting midyear. Also looking for combining with PD1 for NHL, in partnership with a major pharma company. Anticipates signing an agreement by midyear. Talking with potential partners about platform efforts.

Epizyme has a global development plan for tazemetostat, which includes a five-arm, phase 2 study in patients with NHL, a three-arm phase 2 study in adult patients with certain genetically defined solid tumors which initiated dosing in the quarter, and a dose-escalation and dose-expansion phase 1 study in pediatric patients with certain genetically defined solid tumors. Tazemetostat preliminary data will be presented at ASH for the 3 arms that have passed their futility analysis: germinal center DLBCL with EZH2 mutation; same with wild-type EZH2; and non-germinal center DLBCL. The five arms will be expanded to enroll 45 or 60 patients each. Solid tumor preliminary data will also be available to present at ASH.

The IND was accepted to tazemetostat for mesothelioma characterized by BAP1 loss-of-function. A phase 2 trial should start in Q3.

In the first half of 2016, Epizyme will initiate additional clinical evaluations of tazemetostat as a combination therapy, including a phase 1/2 study with R-CHOP in front-line high-risk patients with diffuse large B-cell lymphoma and a combination study with a B-cell signaling agent or immuno-oncology agent (PD1 or PDL1) in B-cell lymphoma.

A dose-escalation study of pinometostat in pediatric patients with MLL-r acute leukemia is continuing enrollment. Epizyme is partnering with Celgene for potential clinical development of pinometostat in combination with other agents.

Epizyme has preclinical work underway with five new targets. The first of these is BAP1 loss-of-function mesothelioma. A prioritized set of HMT and CMP targets has been identified and prioritized.

Three programs are partnered with GSK and three with Celgene.

Cash and equivalents ended at $312.7 million, up sequentially from $208.3 million. In the quarter Epizyme raised $130.1 from the sale of common shares.

Operating expenses of $23.6 million consisted of $17.7 million for R&D and $5.8 million for general and administrative. Loss from operations was $23.1 million.

As usual, a lot of questions were asked to which the answer was you have to wait for the data to be released at ASH.

If we don't meet the futilty hurdles we will stop enrollment in those arms.

R&D expense is expected to ramp through 2016 to support the expanded clinical trial activity.

Q&A:

In the follicular arms, will we get data at ASH? The responses may take longer to occur in this indication. We will not present data unless these arms pass futility before ASH. But we can present safety information across all arms.

Maturity of data for FDA given expanded enrollment? That would be data driven. We will look for the earliest opportunity.

Partnering a platform program thoughts? CRISPR and other experiments has led us to new classes of targets. We would like co-funding and also shared expertise.

Phase 2 expansion reasoning? It was designed as Phase 1/2. We wanted to confirm we are seeing activity. Then we increased patients to narrow the confidence interval. The point is to decide how best to go forward.

What do investors get in return for that? Could these become registration enabling? Yes, some cohorts could go forward with an accelerated registration strategy.

Lisarch (sp?)? Lisa is the premier lymphoma cooperative group in France. Lisarc is the operational arm for lisa. We look to gain expertise and move forward into a frontline setting. They can also help us accrue patients quickly. They are the official sponsor of the study.

Timing of mesothelioma data? 2017 initial data probably.

RCHOP data? Possibly 2017 for the dose escalation data.

45 vs. 60 patients arms? It is based on statistical assumptions. The bar is higher for follicular lymphoma for activity, so you don't need as many patients.

We have seen responses in follicular lymphoma, but the futility hurdle is higher: you need more responders from the first ten patients. But the hope is it is a matter of time.

Are you understanding the mechanism of action better from the trials? That is the intent.

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