Analyst Conference Summary

biotechnology

Release date: November 2, 2018
for quarter ending: September 30, 2018 (third quarter 2018, Q3)

Forward-looking statements

Overview: No conference held, just a press release. Partial clinical hold in pediatric tazemetostat trial resolved during the quarter. Tazemetostat NDA planned for 2019.

Basic data (GAAP):

Revenue was $0.0 million, down sequentially from $12.0 million, and flat from $0.0 million in the year-earlier quarter. All revenue was from collaborations.

Net loss was $37.5 million, up sequentially from a loss of $29.1 million, and down from a $37.6 million loss year-earlier.

EPS was negative $0.54, up sequentially from negative $0.42, and up from negative $0.63 year-earlier. The share count increased to 69.5 million from 59.9 million year-earlier, so the lower higher EPS was due to dilution.

Guidance:

none

Conference Highlights:

Robert Bazemore, president and CEO said “We have seen clinically meaningful activity with tazemetostat in patients with follicular lymphoma, both with and without EZH2 activating mutations, and are pleased that enrollment of patients with EZH2 activating mutations has re-opened in the U.S. With this, we remain on track with our previous guidance of completing enrollment in our Phase 2 study by the end of the year. Tazemetostat has also demonstrated clinically meaningful activity, with both durable objective responses and encouraging overall survival, in patients with epithelioid sarcoma, a difficult-to-treat rare cancer. Based on these positive data, we are confident in our planned NDA submission for epithelioid sarcoma in the first half of 2019. With our highly experienced management team, we are positioned to lead the company through several near-term inflection points and the commercial launch of tazemetostat, if approved"

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), in several cancer indications.

Tazemetostat for epithelioid sarcoma trials had positive Phase 2 results that Epizyme believes qualifies for accelerated approval (before a Phase 3 trial). Positive updated data from Phase 2 were presented in October 2018, with an NDA expected in the first half of 2019. A confirmatory study is being prepared to support the registration strategy and full approval. ES is rare but usually deadly.

Tazemetostat for follicular lymphoma (a kind of NHL) Phase 2 study EZH2+ enrollment should complete by the end of 2018. Epizyme will continue to work with the FDA to refine a registration strategy for accelerated approval. Already has orphan and fast-track status. A combination study is planned to start before the end of 2018.

Tazemetostat is in Phase 2 combination with prednisolone, RCHOP, and atezolizumab cohorts in relapsed/refractory DLBCL, (another kind of NHL). Despite clinical activity and safety, the monotherapy path was discontinued after interim data showed insufficient efficacy. But may pursue other taz combinations in future trials for DLBCL.

Tazemetostat is also in a three-arm phase 2 study in adult patients with certain genetically defined, InI1-negative solid tumors.

In mesothelioma, Tazemetostat trial completed Phase 2 enrollment in Q2 2017. At ASCO reported the study achieved its primary endpoint, with a 51% disease control rate at 12 weeks (pre-specified threshold was 35%). FDA granted orphan drug designation for this indication.

A Tazemetostat study for pediatric patients with genetically defined solid tumors or NHL was started by the NCI in July 2017 with enrollment to complete 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.

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.

EZM8266 for G9a [EHMT2] inhibition is in clinical approach, preclinical details were presented at ASH. It targets sickle cell disease. But Phase 1 won't start until 2019.

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 $180.8 million, down sequentially from $215.6 million. In October raised an additional $86.25 million with a stock offering at $9.00 per share. Epizyme believes it has sufficient funding though at least the first quarter of 2020. Longer if milestone payments are received or new partnership revenue comes in.

Operating expenses of $38.6 million consisted of $27.0 million for R&D and $11.5 million for general and administrative. Loss from operations was $38.6 million. Other income was $1.1 million.

Q&A:

No conference held. A conference was recently held to discuss ESMO results

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