Analyst Conference Summary

biotechnology

Release date: August 9, 2021 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2021 (second quarter 2021, Q2)

Forward-looking statements

Overview:

Basic data (GAAP): Tazverik revenue growing, but still way underwhelming. Bleeding cash.

Revenue was $13.0 million, up 71% sequentially from $7.6 million, and well up from $2.5 million in the year-earlier quarter.

Net income was negative $64.4 million, up sequentially from negative $70.3 million, and down from negative $58.5 million year-earlier.

EPS was negative $0.63, up sequentially from negative $0.69, and down from negative $0.58 year-earlier.

Guidance:

Cash runway into Q4 2022, a reduction. However, will reduce 2021 expenses to $220 to $230 million, non-GAAP.

Conference Highlights:

Robert Bazemore, President and CEO said "Tazverik has significant potential as a backbone of therapy in both epithelioid sarcoma and follicular lymphoma based on real-world evidence and physician feedback. With that in mind, the challenging launch environment and evolving expectations of the future commercial landscape have led us to revise our commercial strategy and operating plans, prioritizing company resources on our most important value-driving activities. Most significantly, we have taken steps to realign our current commercial organization, reducing traditional sales roles and creating new field roles to achieve better access to thought leaders and large community oncology practices. These, and other changes across our business, are designed to reduce our cash burn and allow us to maintain sufficient operating capital to achieve important milestones" There was a drop in prescription demand in April and May. New presciption volumes for FL and ES remain down from pre-pandemic levels. Budgeted headcount has been reduced by 20%.

Grant Bogle will replace Robert Bazemore as President and CEO.

Tazverik revenue was $8.0 million, up 29% sequentially from $6.2 million and well up from $2.2 million year-earlier. However, $3.2 million of Tazverik sales was for use in a third-party clinical trial. Collaboration revenue was $5.0 million. In February 2021, the NCCN Clinical Practice Guidelines in Oncology were amended to recommend Tazverik for relapsed/refractory FL patients with no satisfactory treatment options and whose EZH2 status is unknown.

Despite the slow ramp, Epizyme believes Tazverik represents a multi-billion dollar global market oppertunity. Only 800 ES patients in the U.S., about 300 eligible for Tazverik. Average ES duration of therapy 4 to 5 months. Expects physicians will use earlier as they gain experience. Believes FL and ES presciptions will improve as pandemic subsides.

The Tazverik (tazemetostat) for follicular lymphoma (a kind of NHL), relapsed/refractory, was approved by the FDA on June 18, 2020, for third-line therapy. Covers both EZH2 mutations and wild type EXH2. A confirmatory study will be needed for full approval.

In Q2 announced a collaboration with HutchMed in China. This commercial and development collaboration will extend Tazverik’s reach to China and allow for additional exploration of Tazverik in new combinations across multiple tumor types. Epizyme will receive an upfront payment of $25 million from HutchMed in Q4 2021, with potential future development, regulatory and commercial milestone payments of up to $285 million. The IND received clearance in China in July 2021.

The combination of tazemetostat with standard-of-care treatments, enzalutamide or abiraterone, was evaluated in the Phase 1b safety run-in portion of the EZH-1101 trial which enrolled a total of 21 men with metastatic prostate cancer. Preliminary data later in 2021. Epizyme plans to initiate two signal finding basket studies to evaluate tazemetostat safety and efficacy across multiple new types of hematologic malignancies and solid tumors.

The safety portions of both the ES and FL confirmatory trials with Tazverik are both fully enrolled and the efficacy expansion portions of both trials remain on track. The ES confirmatory trial is evaluating Tazverik in combination with doxorubicin compared with doxorubicin plus placebo as a front-line treatment for ES. The FL confirmatory trial is evaluating Tazverik in combination with R2 (Revlimid plus Rituxan) compared with R2 plus placebo in the second-line treatment setting in patients. Progress around the clinical development of tazemetostat in earlier lines of therapy for FL and opportunities in new solid tumor indications, including prostate cancer, continues. Patient enrollment also continues in several collaborative studies, including the Lymphoma Study Association (LYSA) trial in front-line Diffuse Large B-cell Lymphoma (DLBCL) and FL, and in investigator sponsored trials.

Tazemetostat will start a Phase 1 study in solid tumors before the end of 2021. The prostate cancer study started enrolling the Phase 2 portion in July 2021.

SETD2 inhibitor molectule IND accepted by FDA in Q2 2021. The Phase 1 trial will begin later in 2021.

See also the Epizyme pipeline page.

Cash and equivalents ended at $244 million, down sequentially from $299 million. Long term debt was $216 million.

Operating expenses of $71 million consisted of: cost of goods sold $2.5 million; $35 million for R&D and $34 million for general and administrative. Loss from operations was $58 million. Other expense was $6 million.

Q&A summary:

Are there any other international deals in the works? We continue to look for ways to bring Tazverik to patients outside the United States.

Pharma partner revenues? We cannot disclose that. Purely a sale of product, no rights sold. We are seeing interest from other partners for combinations and new indications.

Underlying demand for Tazverik, trend? Overall demand increased 3% Q1 to Q2, but that was impacted by greater demand for patient assisting programs. But we have converted some of those patients to commercial payments. Saw a return to growth in June after declines in April and May. Partly that was the effect of clinical studies in academic centers. July saw higher utilization over June. Hard to predict for the full quarter or for Q4.

It will take time for the new strategy to take affect and increase adoption.

Wild type usage, screenings? Educating physicians on the data and label has been a challenge. PFS is a big benefit, but it is not in the label. We are seeing growth in second and third line patients.

There is a misconception with doctors that it is EZH2 only. We are trying to correct that.

Tazverik demand by EZH2 status? We do not have that data because prescriptions goes through specialty pharmacies and distributors. Surveys shows we have a third share in EZH2 patient in third line, some patients in second line, mostly EZH2 positive.

OpenIcon Analyst Conference Summaries Main Page

Search

More Analyst Conference Pages: