Analyst Conference Summary

biotechnology

Release date: November 9, 2021 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2021 (third quarter 2021, Q3)

Forward-looking statements

Overview: Tazverik sales continue to disappoint.

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

Revenue was $5.2 million, down sequentially from $13.0 million, and up from $3.6 million in the year-earlier quarter.

Net income was negative $66 million, down sequentially from negative $64 million, and down from negative $55 million year-earlier.

EPS was negative $0.64, down sequentially from negative $0.63, and down from negative $0.55 year-earlier.

Guidance:

Cash should last to end of 2022.

Conference Highlights:

Grant Bogle, President and CEO said "I am pleased with the progress we made as an organization in the third quarter against the four pillars of our strategic plan. In terms of Tazverik commercial performance, total end user demand grew 22% this quarter versus the second quarter. The changes we made to the commercial organization are showing signs of traction. Several provider institutions took steps to enhance the integration of Tazverik and the EZH2NowSM test within their care delivery systems and workflow in a way that simplifies the ability of physicians who wish to prescribe Tazverik for appropriate patients," Beginning to see impact from cost-saving initiatives. Total patient demand grew 22% sequentially. Also added new accounts in Q3. In Q4 launched a direct-to-patient campaign.

Tazverik revenue was $5.2 million, down sequentially from $8.0 million and up from $3.4 million year-earlier. In Q2 2021 $3.2 million of Tazverik sales was for use in a third-party clinical trial. Collaboration revenue was $0 million.

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.

In Q4 2021 received IND clearance for EZM0414, a first-in-class oral SETD2 inhibitor. Received fast-track status in DLBCL. Plan is to enroll the first patient in Phase 1b study before year end 2021.

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 + R2 across multiple tumor types. Symphony-1 is a confirmatory study for R/R FL. Epizyme will received 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. Phase 1b data will be reported at ASH 2021.

Epizyme received clearance from the FDA to EZH-1501, its hematology basket study, evaluating tazemetostat across multiple hematological malignancies. With this announcement, both of the Phase 1/1b basket studies have been cleared to proceed. The solid tumor basket study (EZH-1301) is open for enrollment and the hematological basket study is expected to begin enrolling patients by year end.

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.

The tazemetostat prostate cancer study started enrolling the Phase 2 portion in July 2021.

See also the Epizyme pipeline page.

Non-GAAP net income negative $62 million, down from negative $50 million year-earlier. Non-GAAP EPS not stated.

Cash and equivalents ended at $221 million, down sequentially from $244 million. Received $25 million in Q3 2021 from HutchMed. Long term debt was $216 million.

Operating expenses of $69 million consisted of: cost of goods sold $2 million; $35 million for R&D and $33 million for general and administrative. Loss from operations was $64 million. Other expense was $2 million.

Q&A summary:

SETD2 in disease landscape? First in kind. Plays an important role in protein in multiple myeloma, particularly in a subset of patients. First will find the dose, then will address three groups, positive MM, negative MM, and DLBCL. After monotherapy will look at combo therapies.

We should be able to provide data updates next year, including early in the year. We have a lot of trials, there should be a constant stream of data.

What is driving organizations to optimize Taz workflow? It is important to develop advocates within the account. Then organizational leadership, examining the workflow and how to improve it. Optimization varies by organization. It only gets done when it is prioritized.

Basket study is cooperating with HutchMed. They have a big pipeline, they are doing their own combinations beyond what we are doing.

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