Analyst Conference Summary

biotechnology

conference date: November 1, 2017 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2017 (third quarter 2017, Q3)

Forward-looking statements

Overview: Hopes tazemetostat will become its first approved therapy in 2018.

Basic data (GAAP):

Revenue was $0 million, down sequentially from $10.0 million, and down from $6.6 million in the year-earlier quarter.

Net loss was $37.6 million, down sequentially from a loss of $28.0 million, and down from a $24.3 million loss year-earlier.

EPS was negative $0.63, down sequentially from negative $0.48, and down from negative $0.42 year-earlier.

Guidance:

Existing cash is sufficient to fun planned operations through at least Q3 2019.

Expects a modest increase in R&D spend in 2018.

Conference Highlights:

Robert Bazemore, president and CEO said “2017 has been a year of tremendous progress, with additional important milestones remaining this quarter, including our scheduled interaction with the FDA to begin discussing the registration strategy for tazemetostat in NHL. Our experienced management team is executing well on the drivers for both short and long-term Epizyme growth. Our clinical organization is delivering on a comprehensive tazemetostat clinical program according to our plans; our research team has named G9a as the target for the next program in our pipeline; and our business operations team completed a capital raise that meaningfully extended our runway. I am confident in our ability to build on this momentum as we begin the transition into a commercial company, with our first NDA submission targeted for 2018 and the potential launch of tazemetostat to follow.”

Sees tazemetostat as potentially treating both solid and blood cancers, in multiple indications, and eventually in the first-line setting.

Epizyme has a global development plan for tazemetostat (an EZH2 inhibitor), which includes a phase 2 study in patients with NHL which has completed enrolling three of five cohorts. Interim data from all 5 cohorts was presented at ICML on June 14. Tazemetostat in combination with prednisolone in relapsed/refractory DLBCL, was added as the sixth cohort of the Phase 2 NHL study. Also added a follicular lymphoma cohort in January.

In June positive interim data, grouped by EZH2 status, was presented from the Phase 2 trial for FL (follicular lymphoma) and DLBCL, showing safety and activity. Single agent for patients with EZH2 status had a 92% response rate for FL. Even the wild type (normal EZH2) FL cohort had a 26% objective response rate. R/R DLBCL with mutant EZH@ had a 29% objective response rate, and may evolve as time on treatment increases. About 20% of FL & DLBCL patients have an EZH2 mutation. Enrollment is accelerating.

Tazemetostat is also in a three-arm phase 2 study in adult patients with certain genetically defined, InI1-negative solid tumors. The pediatric recommended dose was established in a Phase 1 study.

In mesothelioma, Tazemetostat trial completed enrollment in Q2, faster than expected. The study achieved its primary endpoint, a 30% disease control rate at 12 weeks. Durability will be assessed, with data in 2018. FDA granted orphan drug designation for this indication in September.

New Tazemetostat data will be presented at ASH. Expects to talk to FDA about registrational strategy this quarter. More studies, including combinations, are planned.

A new Tazemetostat study for pediatric patients with genetically defined solid tumors or NHL was started by the NCI in July.

Enrollment was completed in the mesothelioma with BAP1 loss of function Phase 2 trial. Data expected in 2018.

Data was presented at ASCO. Tazemetostat is a first-in-class orally administered EZH2 inhibitor. The interim data is from the Phase 2 trial for INI1-negative epithelioid sarcoma. The regulatory meeting for this indication was held and a registration path for accelerated approval was determined. Three other arms of the trial, for different solid cancers.

For epithelioid sarcoma, which is rare and aggressive and characterized by the loss of INI1 protein, the results were positive. 31 patients were in the study group, ranging in stage of the disease and in number of lines of prior therapy. Current treatment has limited benefit. 13% of patients had objective responses (2 first line, 2 5th line) and 19% had stable disease, but there were no complete responses. So 32% had disease control, the primary endpoint of the study. Median progression free survival has reached 5.7 months. Complete enrollment is expected in 2018.

A Phase 1b study of tazemetostat with Tecentriq for patients with with relapsed/refractory diffuse large B-cell lymphoma (DLBCL) was continuing by Genentech/Roche. Also planned is a similar trial in non-small cell long cancer.

Epizyme continued 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.

Preparing for G9a [EHMT2] inhibition clinical approach, details at ASH.

Epizyme has preclinical work underway with five new targets that are planned for introduction into the clinic by 2020.

Three programs are partnered with GSK and three with Celgene, including some that are undisclosed.

See also the Epizyme pipeline page.

Cash and equivalents ended at $307.2 million, up sequentially from $193 million. $151.3 million was raised in a public stock offering. Epizyme believes it has sufficient funding though at least the third quarter of 2019. Longer if milestone payments are received or new partnership revenue comes in.

Operating expenses of $38.1 million consisted of $28.7 million for R&D and $9.3 million for general and administrative. Loss from operations was $38.1 million. Other income was $0.5 million.

Still on track to introduce the newest product candidate from the platform later this year.

Q&A:

Lymphoma combinations you will have in 2018? DLBCL ongoing trials: R-CHOP elderly front line has been in dose escalation. Then with steroid, a cohort of monotherpay study. Then one with Genetech and Tecentriq and atezolizumab is accruing well.

Lymphoma filings in 2019? NHL is a large program, the study is still ongoing. First meeting will focus on FL, as the fastest path to market.

Mesothelioma potential for filing? Completed accrual, data presentation in 2018. The data will give us direction on what kind of trial to move forward with.

DLBCL timeline? We are continuing to enroll that cohort, the response rate is evolving, so we want to wait to talk to the FDA when we are more assured of success.

Cash guidance if an additional NHL study? Key assumptions on clinical studies: confirmatory study for epithelioid sarcoma; a new FL combo study to start in 2018; and the Genetech collaboration on NSCLC to start enrolling patients soon.

Sickle cell, given the competition? G9a inhibitor science published by others linked to hemoglobin expression. An epigenetic approach is very different from the other strategies being tried. We are taking a disciplined investment approach.

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