Analyst Conference Summary

biotechnology

conference date: November 3, 2016 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2016 (third quarter 2016, Q3)

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). Aims to commercialize tazemetostat as soon as possible.

Basic data (GAAP):

Revenue was $6.6 million, up sequentially from $0.5 million, and down from $0.4 million in the year-earlier quarter.

Net loss was $24.3 sequentially, up sequentially from a loss of $28.0 million, and down from a $23.1 million loss year-earlier.

EPS was negative $0.42, up sequentially from negative $0.49, but up from negative $0.56 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 "We are executing on a broad clinical program for tazemetostat based on its early clinical activity and safety profile, and guided by strong scientific rationale. We expect 2017 to be an important year for Epizyme, led by data from the Phase 2 studies in non-Hodgkin lymphoma and genetically defined solid tumors in the first half of the year, and determination of our potential registration pathways beginning mid-year."

Epizyme has a global development plan for tazemetostat (an EZH2 inhibitor), which includes a phase 2 study in patients with NHL. "In September the independent data monitoring committee confirmed that the fifth arm of our NHL study, evaluating patients with wild type follicular lymphoma, surpassed its futility hurdle for efficacy." A collaboration with Foundation Medicine, Inc. will support patient identification and enrollment, testing for EZH2 mutations.

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 and discuss registration strategies based on the NHL and solid tumor studies.

Tazemetostat enrollment continued 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 and is enrolling well.

A Phase 1b study of tazemetostat with Tecentriq with relapsed/refractory diffuse large B-cell lymphoma (DLBCL) was initiated by Genentech/Roche.

Epizyme initiated 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..

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. A prioritized set of HMT and CMP targets has been identified and prioritized.

GSK started a Phase 1 trial of a Epizyme PRMT5 inhibitor, generating a $6 million milestone payment.

Three programs are partnered with GSK and three with Celgene.

Cash and equivalents ended at $263.3 million, down sequentially from $288.6 million. Epizyme believes it has sufficient funding though at least the second quarter of 2018.

Operating expenses of $31.4 million consisted of $23.9 million for R&D and $7.5 million for general and administrative. Loss from operations was $24.8 million. Other income was $0.5 million.

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

Q&A:

The negative tumors are of a variety of types in the (INI1 negative) 5 arm trial. We think there are potentially 3,000 to 4,000 patients per year with these types of tumors in the developed markets.

Bar for success in follicular lymphoma for monotherapy given current competition? We are in the relapsed/refractory setting. Other studies have shown about a 50% response rate. We are encouraged by our study, we are seeing responders with long duration. The safety profile has been very encouraging.

Inhibition of EZH2 is involved in several aspects of immune response include infiltration by tumor cells. Hence the Roche trial.

Pinometostat? Collaborating with National Cancer Institute. The best way forward would appear to be in collaboration for acute leukemias.

Our NHL patients have typically already had 3 or more therapies, so the response rate is hard to compare to other trials.

Given the lack of therapies, even a modest benefit for INI patients could be significant.

We will discuss solid tumor data with the FDA, which could be mid-2017, and then NHL, which could be second-half 2017.

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