Analyst Conference Summary

biotechnology

Release date: March 1, 2022 @ 5:30 AM Pacific Time
for quarter ending: December 31, 2022 (fourth quarter 2021, Q4)

Forward-looking statements

Overview: Tazverik continues to sell poorly; management emphasizes the pipeline, including Tazverik revenue expansion.

Basic data (GAAP):

Revenue was $11.6 million, up sequentially from $5.2 million, and up from $8.4 million in the year-earlier quarter.

Net income was negative $51 million, up sequentially from negative $66 million, and up from negative $66 million year-earlier.

EPS was negative $0.49, down sequentially from negative $0.64, and down from negative $0.65 year-earlier.

Guidance:

Cash should last to Q3 of 2023. 2022 non-GAAP op ex $160 to $180 million.

Conference Highlights:

Grant Bogle, President and CEO said "Epizyme entered 2022 demonstrating continued progress on our commercial efforts to drive prescription growth for Tazverik as a monotherapy, as well as advancing our key combination clinical studies, which we believe have the potential to significantly expand the value and reach of Tazverik among physicians and patients as the data mature. In support of our commercialization and development efforts, we continue to make operational changes to reduce our expenses and extend our cash runway, while strategically deploying our resources to the areas we believe may be of highest impact for the company and its stakeholders."

Announced a further expense reduction including a 12% reduction in force. But that will add termination costs of about $3 million in Q1 2022.

Tazverik revenue was $11.6 million, up sequentially from $5.2 million and up from $4.5 million year-earlier. But $4.2 million of Q4 2021 tazverik revenue was for third-party use in clinical trials, so just $7.4 million was for commercial patients. 29% of end-user demand was provided free by the company. 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 Q1 2022 Epizyme discontinued enrollment in its Phase 2 study of tazemetostat in combination with rituximab (SYMPHONY-2, EZH-1401), as well as its Phase 1/1b basket study evaluating tazemetostat combinations in patients with solid tumors (EZH-1301). The decision to discontinue enrollment in these studies was based on evolving market dynamics.

In Q4 2021 initiated a Phase 1 study of EZM0414, a first-in-class oral SETD2 inhibitor. Received fast-track status in DLBCL and Orphan drug status for multiple myeloma.

In December 2021 started Phase 3 trial in 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 opened EZH-1501, its hematology basket study, evaluating tazemetostat across multiple hematological malignancies, in Q4 2021. 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.

The Phase 2 Lymphoma Study Association study of tazemetostat + RCHOP in front line Diffuse Large B-cell Lymphoma (DLBCL) and FL is nearly complete as of March 1, 2022. Interim results are expected before the end of 2022.

The tazemetostat prostate cancer study started enrolling the Phase 2 portion in July 2021. It was about 75% enrolled as of March 2022.

See also the Epizyme pipeline page.

Cash and equivalents ended at $177 million, down sequentially from $221 million. Raised $79.5 million from a common stock offering in January 2022. Long term debt was $216 million.

Operating expenses of $63 million consisted of: cost of goods sold $3 million; $29 million for R&D and $30 million for general and administrative. Loss from operations was $51 million. Other income was $1 million.

Q&A summary:

Taz potential 2022 growth drivers? We are seeing steady progress. We have added sales associates.

Discontinued basket study? We want to optimize our investments. We were concerned about overlaopping toxicities. We will have some data that can help us formulate a future path for solid tumors. We believe we can get the data in a more efficient way.

Taz duration of use? The general trend is for increasing duration. We see some trend to use Taz earlier, as in second line. but most is still 3rd line.

We do believe Taz can combine with a variety of other agents for both solid and heme studies.

EZM0414 trial? First we want to do they dosing portion. With biomarkers that will determine the targets we expand the trial into.

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