Agios Pharmaceuticals, Inc. (AGIO) Earnings Call Transcript & Summary

All right. Why don't we get started. I'm Andy Berens, Senior Biotech Analyst at SVB Leerink, and we're pleased to have Jackie Fouse, CEO of Agios with us. Thank you for joining us, Jackie.

Happy to be here.

Appreciate it. I know, obviously, it's a name that a lot of people know, but maybe there's some people in the room that don't know the story. What -- can we just get a brief overview of the company before we dive in?

Sure. Sounds good. So I'm going to stand up for this. I just have like 3 or 4 slides to walk people through. For those of you who are less familiar with our story, these are the forward-looking statements. So we are a company that has our scientific roots in cellular metabolism. That's how we were founded, and we are sticking with that. We've not varied from that scientific foundation. What we're finding is that science and cellular metabolism is allowing us to bring therapies, transformative therapies to patients in a number of different areas. We've brought IDH inhibitors to acute myeloid leukemia patients with an IDH mutation. And we have trials ongoing or completed, where we will proceed with regulatory filings for IDH mutant solid tumors as well. So we're in both the malignant hematology space with those 2 products, TIBSOVO and IDHIFA, and we have another compound moving into -- potentially into glioma. So we've brought that science to oncology. We're now on the brink of some very exciting data in 2020, and I'll talk about that in just a minute. That's, again, come from that scientific platform. And it's a pyruvate kinase reaction activation program that will take us into the rare genetic disease and nonmalignant hematology space in terms of the first wave of indications that we see there. We also have a very concentrated effort in solid tumors outside of IDH inhibition that -- where we have a MAT2A inhibitor that we are studying now, currently in combination for lung cancer and pancreatic cancer, with a view to making some decisions about pivotal trials for that program in the next couple of years. But our solid tumor effort is very focused. So staying focused on those 3 high-level therapeutic categories. Where are we today? We have 2 approved medicines. So this is a company that's been around for -- I think, we're going into our 12th year, technically. Already have 2 products on the market. One of those products is partnered with Celgene-Bristol. The other one is wholly owned. They're both approved in acute myeloid leukemia, as I said. We have 4 molecules in the clinic that are in addition to the ongoing Phase III trials for the 2 products that we have on the market. And we gave our first revenue guidance this year with -- this is our second full year on the market with our IDH1 inhibitor, TIBSOVO and acute myeloid leukemia, and we gave our guidance for that. We finished the year last year with about $60 million of revenue, and we expect $105 million to $115 million of revenue for that product, which is our wholly owned product. We also have a royalty stream on the IDH2 inhibitor product that's partnered with Celgene. Now based on programs that we have in the clinic today and things that we have moving through the late stages of our discovery pipeline, here's where we think we can be in 2025. Why are we talking about 2025? Because we see a clear path to achieve these goals with assets that we have in our hands today, many of which have been already pretty significantly derisked, and we'll talk about those, I'm sure, a little bit in the discussion today. So we wanted to put some stakes in the ground around where we see this company going and where we can be in 2025. And very importantly, what we will see -- just go ahead and click through all the builds here, we will have important, either new indication approvals, new product approvals or significant data readouts every single year over the next 6 years from now out to 2025. So whatever time frame it is that you're most interested in, I think we have something to offer in terms of attractiveness of the proposition for what we're doing at Agios across all 3 of our therapeutic categories of focus. And I won't go through every one of those. Happy to follow-up on those with you. In 2020, we expect some significant milestones. We expect an overall survival readout for our cholangiocarcinoma trial, and we're proceeding to regulatory approval for that and IDH1 inhibition for cholangiocarcinoma. We have a number of things going on here around the hematology franchise and expansion of that in the malignant space. Again, I'm not going to cover every one of these. Very importantly, we will have data readouts on 3 indications for our first pyruvate kinase reaction activator molecule, mitapivat, where we expect readouts on our Phase -- 2 Phase III trials at the end of this year, and we expect data presentations at EHA in June for thalassemia and sickle cell disease, and then we'll be discussing with you how we carried those programs forward. So it's a very exciting time for us, and we've got a number of things coming through the research pipeline as well. So that's a quick, quick one, and I'll let Andy ask me a bunch of questions.

Great. Thanks, Jackie, for that overview. I think what we'll do is we'll start talking about the commercial assets first, then I'll open it up to questions to see if everybody has -- anybody in the audience has questions for Jackie regarding that, and then we'll dive into the pipeline. So sounds good?

Sounds good to me.

Okay. So let's talk about the IDH inhibitors. Obviously, one of the things, I think, investors have struggled with was the impact of Venclexta conquering the AML space. That doesn't appear to have happened, but anyway, there's -- that's still a concern, obviously. Can you give us an idea of, I guess, the AML landscape today with Venclexta? And where you see it a couple of years from now, the impact on the IDH inhibitors?

Yes. So I mean, the first thing I would say, competition is always a healthy thing because it keeps all of us on our toes. The other thing I would say with these -- with drugs as they come to market in some of these indications is it takes a little bit of time for the data updates to play out and for you really to see how some of these drugs are going to settle into their treatment paradigms in any given space. We've seen, I think, 11 or 12 drugs come to acute myeloid leukemia in the last 2 to 3 years, which is great for those patients and physicians who are now figuring out how to best use those. The IDH2 drug that we discovered and developed with Celgene came to market in 2017. Our IDH1 mutant drug for AML came to market in 2018. Venclexta came to market in 2018 as well, and it's a non-IDH specific drug. So I think what we've seen now with the data updates, especially at ASH last year, as we've continued to update our data on the IDH mutant populations for our drugs, we see, over time, the durability of responses has continued to increase, the depth of responses in terms of molecular clearance has continued to increase, and we've seen CR rates increase, and the overall response rates increase over time. So as Venclexta updated their IDH subset data at ASH, we saw a pretty clear difference in terms of our targeted therapy data compared to their relatively small IDH subset patient population. So I think, to your point, when they first came to market, there were some physicians who thought they could use Venclexta for everything. I think now we are seeing and our market research tells us as well as the uptake of our revenues that there is a desire by physicians to target the target. So if you have an IDH mutation, I think that you are going to get an IDH inhibitor therapy over the course of your treatment. So we've continued to see a great uptake in both the relapsed/refractory settings, and TIBSOVO, our IDH1 mutant drug, is labeled in the front-line setting for monotherapy, and so we're seeing uptake in both of those. Though we don't promote clearly to off-label uses, they -- we are also seeing as a combination data of the drugs in -- with hypomethylating agents in chemotherapies have been updated. That data -- those data updates have been very good, and we're seeing some uptake in those segments as well. So we think that targeting the target is going to be the treatment paradigm in AML over time. And we're very happy with where we are. The testing rights, you might ask that question. When IDHIFA came to market, the testing rights for AML -- for IDH mutations were -- the rate was about 70%, I think, across both academic and community settings. When we came to market in the middle of 2018, it was about 80%. Now those testing rights are about 90%. So we've continued to see that come up over time. So testing for these mutations is not an issue.

Right. Okay. And I guess, initially, you approved in relapsed/refractory setting, you submitted a data from a small subset of patients that were predominantly patients that were not eligible for any other type of treatment in the frontline. But the FDA granted you a surprisingly broad label, broader than I think what most people, including us, had expected. So what did that -- why did the FDA make that decision? And I guess, what's been the commercial opportunity for you guys? Again, once you've gotten that broader-than-expected label?

So -- and again, it's a monotherapy label. But I think FDA looked at the totality of the data and just said, look, patients with IDH1 mutation should have access to this therapy. It's hard to say exactly how they were thinking about the label that they ended up giving us, but we've been very happy with it. We got that approval in May of last year. We started to see good uptake in the frontline monotherapy setting as a result of that. And so this year will be our first full year of having that frontline approval. So we would expect even more momentum. And that's one of the reasons why the growth rates from 2019 to 2020, as you've seen in our guidance, are so strong. I also think it does facilitate the -- as there are data updates for the drugs in combination settings, it does facilitate physicians being able to use the drugs in those settings, even though we don't promote to those. And I think you're going to continue to see combination therapies evolve in acute myeloid leukemia, like we saw multiple myeloma over the years, as more and more therapies are available.

Okay. I guess, and the other thing that was surprising to me when I talked to physicians about Venclexta usage is, their label, obviously, requires HMA. And physicians said that one of the things in the frontline, they'd like to avoid HMA. And I'm thinking, if they don't have to use it, they'd prefer not to in some patients. So you guys now have the opportunity to be plus or minus HMA. What is it with HMA, I guess, that some physicians would like to eliminate that?

I think it's more the -- with some patients, you have tolerability issues when you combine things, and so you can get -- you just get more myelosuppression and things like that. And they're just -- it's just nice to have choices, right? So when patients can tolerate combination therapy, that's great when they can. It's nice to be able to have great quality monotherapy options or even sequence some of these things. You also will have some patients, either because they transformed from MDS, who may have seen a hypomethylating agent already in their treatment course. And so I think it's just nice to have choices.

Right. Okay. I guess, in terms of the TIBSOVO HMA opportunity in frontline AML, can you just give us some idea of what you're seeing commercially there?

So we're seeing -- again, we don't promote to that, but we're seeing nice uptake there. We're estimating, and we have data from the specialty pharmacy channel for our drug, which is only maybe 1/3 or so of total scripts, but in that data and with the market research that we do, we think that the combination use is probably about half of the use in AML, and we think that's going to continue. The durations of treatment are also trending up. So if you have more choices of how to use the drug, either in combination or in monotherapy, you're going to use it in different patient populations and patients may be on drug for longer. So we expect durations of therapy to continue to trend up. And I would expect that to generally be the case in AML now. With more treatment options, I think we'll -- for all the drugs, on average, you're going to see durations probably trend up over time.

Okay. What are the durations currently for most of the drugs?

So we are somewhere -- we're a little over 4 months. We expect to exit this year at around 5 months in terms of average duration of treatment across the whole patient population for our drug in both relapsed/refractory and in frontline. And I think, over time, it's just going to continue to go up.

Okay. And then you got breakthrough designation for TIBSOVO and MDS. The enrollment in the trial is going to be completed by year-end. Can you just walk us through how you see the MDS opportunity?