Ironwood Pharmaceuticals, Inc. (IRWD) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Ironwood conference call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would like to now hand the conference over to your speaker today, Meredith Kaya. You may go ahead, ma'am.

Good morning, and thanks for joining us for our IW-3718 program update. Our press release crossed the wire earlier this morning and can be found on our website, www.ironwoodpharma.com. Today's call and accompanying slides include forward-looking statements, including those about our IW-3718 program. Such statements involve risks and uncertainties that may cause actual results to differ materially. A discussion of these statements and risk factors is available on the current safe harbor statement slide as well as under the heading Risk Factors in our quarterly report on Form 10-Q for the quarter ended March 31, 2020, and in our future SEC filings. All forward-looking statements speak as of the date of this presentation, and we undertake no obligation to update such statements. During today's call, Mark Mallon will begin with a brief introduction. Mike Shetzline will then review the update to our 3718 pivotal Phase III program, and Tom McCourt will close with some final comments. Gina Consylman will also be available during the Q&A portion of the call. We will be referring to slides via the webcast. For those of you dialing in, please go to the Events section of our website to access the webcast slides. With that, I will turn it over to Mark.

Thanks, Meredith, and thanks to everyone for joining us this morning. We certainly hope that you and your families are all safe and healthy in these challenging times. Ironwood's vision is to become the leading U.S. GI health care company, dedicated to advancing GI treatments and redefining the standard of care for millions of patients in need. This line of sight is clear, and we lean on it along with our values during these turbulent times as we strive to make decisions that we believe are in the best interest of GI patients. Amidst this for backdrop, we have responded with great agility as a business in determining what we believe is the best path forward for our 3718 program. We've been working closely with the FDA to find ways to strengthen the 3718 Phase III program despite the enrollment delays we have continued to see today due to the COVID-19 pandemic. I am very pleased with the outcome of these discussions. We believe the new primary endpoints better aligns with the previous Phase IIb study design and with the agency's current view by continuous endpoints. Also, the planned assessment of study 302 is designed to enable an early read on efficacy and provide us with an opportunity for quicker decision-making based on more information on the program overall. This is an important step forward in our ability to conduct clinical trials during these volatile times to better evaluate 3718 as a new product opportunity and to hopefully, if approved, bring 3718 to the millions of patients suffering from refractory GERD. Additionally, colesevelam, the active ingredient in 3718, was previously approved for treating high cholesterol with a robust safety data package. The team has submitted a detailed review of those data to the agency, and we look forward to continued discussions on this matter. I'm more excited than ever on the tremendous opportunity we have in front of us. We look forward to providing updates and answering any questions. With that, I will turn it over to Mike to walk through the updates in more detail. Mike?

Thanks, Mark, and good morning, everyone. I'd like to first take a few minutes to go over the design of our pivotal Phase III program. Our program comprises 2 identical, randomized, double-blind, placebo-controlled multi-center trials of 3718 in patients with refractory GERD, meaning that they have continued symptoms despite taking proton pump inhibitors or PPIs, which is the standard of care for this population. I will refer to each of these 2 trials of study 301 and 302 throughout the remainder of this call. To be eligible for enrollment in the Phase III trials, patients must demonstrate evidence of pathologic acid reflux. Patients enrolled in the trial continue to take PPIs and are randomized to placebo or 3718, 1,500 milligrams twice a day for 8 weeks. As announced this morning, the new primary endpoint of the trials is an assessment of the change from baseline to week 8 in weekly heartburn severity scores. To reiterate what Mark said earlier, I'm confident that these changes will help strengthen our Phase III program and allow us to access 3718 to the patient population more effectively. I will highlight the changes first on this slide and then spend a few minutes going into each one in additional detail. First, as noted earlier, the primary endpoint for the 2 trials has been changed to a continuous endpoint from the previous responder endpoint. Second, we also plan to stop enrollment and conduct a blinded early assessment of efficacy for study 302. The outcome from this assessment is expected to be reported in the fourth quarter of this year. With both these changes and in the case that the assessment of 302 efficacy meets all of the prespecified criteria, we expect to report top line data from both Phase III trials in the first half of 2021. If enrollment is impacted further by COVID, this could mean that there could be further delays to this timing. Separately, while nothing is confirmed at this time, we feel it was important to share that we are currently in discussions with the agency regarding its request for additional long-term safety data for the -- for 3718 in connection with the NDA submission. Moving to the program updates. I will start with the change to the primary endpoint. Here, you will see an overview of our primary and key secondary endpoints on the right with the previous endpoints summarized on the left. The new primary endpoint is an assessment of change from baseline to week 8 in weekly heartburn severity scores. This is very similar to the previous secondary endpoint, which assess the percent change from baseline to week 8. Our decision to change this endpoint was primarily based on recent FDA guidance indicating a preference for continuous endpoints over responder endpoints in assessing clinical outcomes. Our discussion with the agency, combined with the fact that the new primary endpoint is also very similar to the primary endpoint from our 3718 Phase IIb trial, supported our decision to make this change to the trial design. The trials continue to be well powered for the new primary endpoint. We also restructured the statistical hierarchy of the key secondary endpoints, which elevates the statistical prominence of regurgitation in the clinical program. The key secondary endpoints now include, in order of hierarchy, a change from baseline and regurgitation frequency and overall heartburn responder, which was the original primary endpoint in the Phase III program, and a proportion of heartburn-free days. We moved one of the original key secondary endpoints to an exploratory endpoint as aligned with the agency because of its redundancy with the new primary endpoint. Turning now to the early assessment of 302 for efficacy. With the new guidance from the agency, specifically for trials impacted by COVID, combined with having a well-powered study, we have an opportunity to conduct an early assessment of efficacy for study 302. The outcome of this assessment is expected in the fourth quarter. This change provides us the opportunity to make earlier and more informed decisions while not compromising the scientific integrity of the trial. The assessment will be done for the 302 study only. We are in the process of stopping 302 enrollment now. An independent data monitoring committee, or IDMC, is planning to assess the data using prespecified criteria that are consistent with certain of the new primary and key secondary endpoints. We, Ironwood, will remain blinded. Based upon an analysis of the data, the IDMC will then make a nonbinding recommendation to Ironwood. The results could have the following possible outcomes. If the IDMC determines that the data met all prespecified criteria, it would increase our confidence that the 3718 Phase III program may be successful. We would plan to continue enrolling study 301 and target reporting top line results from both trials in the first half of 2021. If the IDMC determines that the data does not need all prespecified criteria, Ironwood then would plan to unblind and analyze the 302 data and determine next steps for the program. As a result of this change, we are now targeting at least 500 patients enrolled in the 302 study and approximately 660 patients enrolled in the 301 study, the latter consistent with the original design. Lastly, I want to comment briefly on the long-term safety data request from the FDA. As you may recall, colesevelam has a demonstrated safety profile. It's been on the market for over 20 years as a treatment for high cholesterol and has clinical data showing its safety profile after 50 weeks. It's been our intention to support a potential NDA with the colesevelam safety package. In response to the agency's request, we provided the agency with a detailed overview of the colesevelam safety data and plan to continue to work closely with them to determine whether we'll need to conduct a long-term safety study to provide additional safety data as part of an NDA submission. It's important for us to note that we do not believe the agency's request due to any new safety signals for 3718, including long-term safety data, is common practice for some therapeutic candidates being developed for long-term chronic or repeat intermittent use. We plan to provide an update on next steps when we have clarity. With that, I'll turn it over to Tom to provide some closing comments.

Thanks, Mike. So to close, the message you've heard today is a clear one. We're taking a leadership position in advancing our 3718 program by making these important updates designed to strengthen the Phase III program. We believe this is a clear advancement. We will now have an earlier read on the efficacy of 3718. Plus, the new primary endpoint, combined with the change in the hierarchy for the key secondary endpoints, provide us with an opportunity to assess the impact of 3718 more effectively on the 2 most bothersome symptoms associated with refractory GERD. If the data from the Phase III trials are positive and 3718 is ultimately approved, we believe it has the potential to bring much needed relief to 8 million to 10 million adult Americans suffering from refractory GERD. Let me reiterate why we believe 3718 is so promising. Refractory GERD patients are suffering from bothersome and disruptive heartburn and regurgitation symptoms regularly despite taking PPI therapy. A significant portion of patients have esophageal erosions. 75% surveyed patients report having regurgitation more than a couple times a week, plus data show that patients with refractory GERD have 3x more ER visits than PPI-responsive patients. Not only are these patients taking PPIs, but many are taking H2s, antacids, changing their diets, increasing their fiber and yet continue to suffer. Our clinical research suggests that the reflux of bile from the intestine into the stomach and esophagus may play a key role in ongoing symptoms of refractory GERD. 3718 is a gastric-retentive bile acid sequestrant, meaning that it can exist in the stomach over an extended period of time, where it's positioned to intercept bile before it reaches the esophagus. We are proud to be leading the investigation of the role of bile in refractory GERD with these clinical trials. We continue to be excited with the progress that we're making with 3718 and its potential, if approved, to deliver significant unmet needs to patients who currently have limited options for the treatment of the refractory GERD. With that, operator, I'll now -- we are now ready to begin the Q&A.

[Operator Instructions] Your first question comes from the line of Marty Auster.

This is Mark on for Marty. I guess the first question I had is to confirm for the IDMC evaluation. Can you provide more details on what the prespecified criteria is that IDMC will be evaluating? Are they specifically going to be evaluating the statistical significance or a certain level of change on those respective endpoints? I'm curious. Yes. So that's my first question.

Thanks, Mark. Mike, I think that's for you.

Sure. Thanks. So what we've said is that the prespecified criteria are consistent with certain of the new primary and key secondary endpoints. If the outcome from 302 at assessment is positive, it increases our confidence that the program may be successful, but we'll not know with any certainty until the actual data from both trials are assessed. And therefore, a positive outcome does not materially predicts success for the overall Phase III program. But we really need to review the data in totality from both trials to determine whether they're sufficient to move forward towards filing an NDA.

Yes. Makes sense. And then my second question is -- so just to confirm, it sounds like the slight change in endpoint from Phase IIb to Phase III as you went from percent change to absolute change, can you speak to what you achieved on the new primary endpoint in the Phase IIb study?

Mike, again, I'll go to you.

Yes. So as you had noted, the continuous endpoint that we have now is the new one aligned with the agency. The refractory GERD population has unique characteristics, and that's what got the discussion we had with the agency around moving from a responder endpoint to a continuous endpoint. And we did appreciate that because the results of the Phase IIb study we utilized to determine the sample size for the Phase III program, as you mentioned, and then the treatment effect really aligns well from Phase III to Phase II -- to the Phase II data. So under those assumptions, both studies are really well powered to detect a significant difference between study 3718, the primaries, I mean, the Phase IIIs and the Phase II. To your point, in the Phase II study, the 1,500 microgram dose showed a 58% reduction in weekly heartburn severity from baseline at week 8, and that compared to 46% with placebo, which was a 12% treatment effect.

Your next question comes from the line of Boris Peaker.

I just want to understand -- my first question is, now that you've added a futility analysis to the study, is there an alpha penalty associated with it, like for the Phase III to be successful at the end, what's the p-value that it needs to reach?

Again, I'm going to let Mike answer that. Thanks, Boris.

Yes. It's a very good point because in essence because of where we are today, meaning we have over 500 patients in the Phase III study, and the well-powered nature of the study, the analysis is not subject to what you're alluding to, which is a p-value correction that you would take at an interim level. We're looking at it from the well-powered nature of the study to have the -- to establish the thresholds we established for the prespecified criteria. So there really isn't an alpha hit at this stage.

But you're using the information from your futility analysis to decide to enroll further or not, and that doesn't create an alpha penalty?

No. That's what -- so again, another great clarification. We're stopping 302 because it's well powered. So if the futility assessment is reached for the 302 study, we will have stopped 302, and then we'll determine next steps based on the totality of the data.

Okay. I see. I guess my last question on phase -- in general, the Phase III program. You mentioned that the Phase II study when reanalyzed using this endpoint showed a 12% treatment effect. What kind of a treatment effect do you think you need to show in the Phase III program to be clinically meaningful?

Mike, why don't you go ahead and take a first stab. And Tom, you can add comments afterwards.

Yes. I think what we've always said is that we're really seeking to replicate the data from the Phase IIb study, which we believe showed a clear drug effect for 3718, especially at the 1,500 dose. The new Phase III primary endpoint is very similar to the primary endpoint for the Phase II. And as I mentioned, we believe that 12% difference, the 58% reduction in treatment for heartburn severity compared to 46% in placebo, has a clinically meaningful benefit. Please recall there's currently no therapies available for this refractory GERD population. So as stated, if we could confirm in Phase III what we saw in Phase II, we think we have a clear product that benefits patients with refractory GERD.

Just a couple of thoughts, Boris. One, we've been working very closely also with a team of KOLs and biostatistics experts to figure out kind of what is that right delta. And I think in this population, certainly, anything that's double digit is considered pretty meaningful. In addition, I think it's important to remind everybody, when you compared heartburn relief or the severity of heartburn relief between H2s and PPIs, the delta was roughly the same in aggregate, roughly about 12% in the population. So I mean, this 12% delta is a very significantly meaningful delta. And certainly, I don't think there's any question that PPIs were superior to H2s. So I think we feel very good about our target here.

Your next question comes from the line of Eric Joseph.