Analyst Conference Summary

biotechnology

conference date: August 8, 2016 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2016 (second quarter 2016, Q2)

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, flat sequentially from $0.5 million, and down from $0.7 million in the year-earlier quarter.

Net loss was $28.0, down sequentially from a loss of $22.9 million, and down from a $25.8 million loss year-earlier.

EPS was negative $0.49, down sequentially from negative $0.41, but up from negative $0.63 year-earlier.

Guidance:

Capital is sufficient to fund Epizyme until at least Q2 2018, well past 2017 milestones.

Conference Highlights:

Robert Bazemore, CEO of Epizyme, said "for the remainder of the year, our focus is on the continued enrollment in and execution of our Phase 2 NHL and solid tumor studies to generate mature objective response and durability data, and to assess the differences in activity between study arms. With a robust clinical program underway for tazemetostat, and advancements in our preclinical and discovery efforts, we believe we are further solidifying Epizyme's position as the leader in epigenetic drug discovery and development."

Epizyme has a global development plan for tazemetostat, which includes a five-arm, phase 2 study in patients with NHL which reported positive early data in June from 30% of the 270 patients planned for the study. "Tazemetostat demonstrated clinical activity, including objective responses, in all five arms of the study and a favorable safety profile in a heavily pre-treated, multiply relapsed and highly refractory patient population." Tumors continue to shrink if the therapy is continued over longer periods of time.

Tazemetostat is also in 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. Epizyme "plans to meet with regulatory authorities, beginning with the FDA in mid-2017, to review data from all cohorts of its Phase 2 solid tumor study and discuss registration strategies based on these data. Epizyme also expects to meet with FDA to review Phase 2 NHL data and discuss registration strategies in 2017."

Tazemetostat "overall patient enrollment is also on-track in the Company's ongoing Phase 2 clinical study in adult patients and Phase 1 study in pediatric patients with INI-1 negative tumors or synovial sarcoma."

A Phase 2 trial for tazemetostat for mesothelioma characterized by BAP1 loss-of-function started in August.

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 in collaboration with the Lymphoma Study Association in France..

Epizyme will collaborate with Genentech/Roche in a combination trial of tazemetostat with Tecentriq (anti-PD-L1 checkpoint inhibitor) in R/R diffuse large B-cell lymphoma (DLBCL).

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 $288.6 million, down sequentially from $312.7 million. Epizyme believes it has sufficient funding though at least the second quarter of 2018.

Operating expenses of $28.9 million consisted of $21.5 million for R&D and $7.4 million for general and administrative. Loss from operations was $28.4 million. Other income was $0.4 million.

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

Q&A:

No plans for presentations at ASH? We will not present a data update at ASH, but rather in the first half of 2017. We want to allow time to show the effectiveness of tazemetostat.

NHL registration from Phase 2 trial? Our clinical development assumptions and regulatory timeline remain intact.

At ASH Lymphoma presentation we felt releasing early Phase 2 data was beneficial, but it raised some questions because early data was compared to Phase 1 data where patients had been treated longer. We also want to have more data to compare cohorts.

Cash runway extension, how? We focused expenditures on the 2020 goals, plus leverage from partnerships. While the majority of investment is in tazemetostat, we continue to invest in the rest of the pipeline.

In the second half of 2016 we will focus on execution of our plan.

Is the pushout in data reporting due to a longer time to response in the Phase 2 trial? No, so far the Phase 2 data is consistent with the Phase 1 data.

We did not think the specific checkpoint molecule was as important as the choice of partner, including expense sharing and including a robust biomarker. As to the study itself, it is up to Roche, so we cannot share details yet.

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