Syros Pharmaceuticals Q2 2024 Earnings Call Transcript

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July 31, 2024

There are 9 speakers on the call.

Operator

Good morning, and welcome to Cyrus Pharmaceuticals Second Quarter 20 24 Financial Results Conference Call. At this time, all participants are in a listen only mode. This call is being webcast live on the Investors and Media section of Cyrus' website at www.syros.com. Please be advised that today's call is being recorded. At this time, I would like to turn the call over to Karen Hanady, Director of Investor Relations and Corporate Communications at Syros.

Operator

Please go ahead.

Speaker 1

Thank you. This morning, we issued a press release announcing our Q2 2024 financial results. The full release is available on the Investors section of Syros' website at www.syros.com. We will begin the call with prepared remarks by Conley Chi, our Chief Executive Officer Doctor. David Roth, our Chief Medical Officer and Jason Haas, our Chief Financial Officer.

Speaker 1

We will then open the call for questions. Kristin Stevens, our Chief Development Officer, is also here on the call with us and will be available for Q and A. Before we begin, I would like to remind everyone that the statements we make on this conference call will include forward looking statements. Actual events or results could differ materially from those expressed or implied by any forward looking statements as a result of various risks, uncertainties and other factors, including those set forth in the Risk Factors section of our quarterly report on Form 10 Q that we filed this morning, our annual report on Form 10 ks that we filed earlier in the year and any other filings that we may make with the SEC in the future. Any forward looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.

Speaker 1

We specifically disclaim any obligation to update or revise any forward looking statements. I would now like to turn the call over to Conley. Conley?

Speaker 2

Thanks, Karen, and thank you everyone for joining us this morning. At Syros, our mission is to develop new standards of care for the frontline treatment of patients with hematologic malignancies. Throughout the first half of twenty twenty four, we've laid a solid foundation in preparation for our upcoming data readouts for tamibarotene in AML and higher risk MDS patients with RARA gene overexpression in the 3rd and 4th quarters respectively. As we approach these readouts, we're working diligently to prepare for our 1st NDA filing and launch. So that upon approval, we are positioned to deliver tamilbarotene to the thousands of higher risk MDS patients in need of better care.

Speaker 2

I am pleased with our continued progress in advancing our launch readiness activities and commercialization plans. As we've previously mentioned, we plan to deliver tamivarotene to patients in the U. S. Through our own commercial efforts following approval. And we are well positioned to execute on this opportunity given the concentrated call point in hematology and our team's successful track record in bringing new medicines to patients in need.

Speaker 2

We believe the market opportunity for tamibarotene is significant. Both higher risk MDS and unfit AML are challenging diseases to treat. There are very few potential frontline therapies in late stage development and there remains a significant unmet need in these two closely related diseases. This creates a meaningful opportunity for our differentiated and biologically targeted approach with tamibarotene to potentially alter the current treatment paradigm and provide profound benefit to patients in need of new options. Syros is currently evaluating tamibarotene in genomically defined subsets of higher risk MDS and AML patients whose disease is characterized by the overexpression of the RARA gene.

Speaker 2

This represents a significant portion of the patient population as we believe approximately 50% of MDS and 30% of AML patients are positive for RARA overexpression. We believe both of these indications represent substantial market opportunities, which provides the potential for tamibarotene to address a significant unmet need. We look forward to an exciting second half of the year with additional Phase 2 AML data in September and pivotal Phase 3 MDS data by mid Q4 as we work to deliver better options for patients. With that, let me turn the call over to David to review our programs and our upcoming milestones in more detail. David?

Speaker 3

Thank you, Conley. We are very encouraged by the advancement of temivarotene, our oral selective RAR alpha agonist as a potential new standard of care for higher risk MDS and AML patients. Across multiple trials to date, tamilbarotene has demonstrated high complete response rates, rapid time to response and a favorable tolerability profile. We believe tambouratin offers competitive differentiation due to its biologically targeted approach and the ability to combine with other therapies used in the treatment of MDS and AML as hypomethylating agents like azacitidine and even venetoclax with no additional myelosuppression. We know that hematologists and oncologists are looking for novel, targeted, convenient and easy to administer medicines that can offer differentiated benefits to patients.

Speaker 3

And this is exactly what we believe we have with tamibarotene. First, I'll start with our study of tamibarotene in MDS, which we are evaluating in an ongoing Phase 3 select MDS I trial in newly diagnosed higher risk MDS patients with RARA overexpression. Select MDS 1 is a global randomized double blind placebo controlled trial evaluating the combination of tami barotene and azacitidine compared to placebo and azacitidine. The trial's primary efficacy endpoint is complete response in the first 190 enrolled patients, which together with supporting durability data can potentially serve as the basis for accelerated approval or full approval. CR is an important and clinically meaningful efficacy endpoint due to its association with overall survival.

Speaker 3

Hematologic improvement, which is included in the CR endpoint criteria, is also associated with clinical benefit because MDS patients often have low peripheral blood counts. Therefore, hematologic improvement is expected to resolve MDS symptoms associated with low counts, such as infections, bleeding and fatigue. Taken together, the short and long term clinical benefits associated with achieving a CR are clinically compelling and reinforce our confidence in the potential of our select MDS-one clinical trial, including our plan to continue enrolling patients to support the key secondary endpoint of overall survival. In June, we hosted a webinar event with 3 distinguished medical experts in the field to discuss select MDS-one and the opportunity for tamibarotene to transform the standard of care for newly diagnosed higher risk MDS patients with RARA overexpression. In these discussions, the physicians all with significant experience in treating higher risk MDS patients emphasized the need for new and safe therapies that provide better outcomes for these patients.

Speaker 3

They also noted the importance of using endpoints to accelerate the development and approval of novel agents and they highlighted CR as the measure correlated to long term benefit and overall survival. We look forward to reporting pivotal CR data from the first 190 patients in select MDS1 later this year, which we are optimistic will build on the clinical observations we have seen to date in both higher risk MDS and AML. Now, let's turn to our select AML1 Phase 2 trial, which is evaluating tamibarotene in newly diagnosed unfit AML patients with RARA overexpression. As a reminder, the objective of this study is to evaluate the safety and efficacy of the triplet regimen of tamibarotene in combination with venetoclax and azacitidine compared to venetoclax and azacitidine alone in approximately 80 patients randomized 1 to 1. In December of last year, we reported data on our initial pre specified analysis, which included 23 patients, 19 of whom were response evaluable.

Speaker 3

The data showed a 100% CRCRI rate and a 78% CR rate in patients treated with the triplet combination of tamibarotene, venetoclax and azacitidine as compared to a 70% CR CRI rate and a 30% CR rate in the patients treated with venetoclax and azacitidine alone. The time to response was rapid with all patients in the triplet arm responding by the end of cycle 1 compared with 60% in the doublet arm. Consistent with prior observations, tami barotene in combination with VENHASA was well tolerated and no new safety signals or additive toxicities were identified. Importantly, there was no evidence of increased myelosuppression in the triplet arm compared to the doublet, which further underscores tamilbarotene's potential in combination with standard of care. We're excited to report the additional select AML1 data in September at the SOHO 2024 Annual Meeting.

Speaker 3

The data are expected to include clinical activity and tolerability data from a pre specified analysis of more than 40 unfit AML patients with RARA overexpression, and we look forward to sharing this update with you. I would now like to turn the call over to Jason, our Chief Financial Officer, to review our Q2 financial results. Jason?

Speaker 4

Thank you, David. Now turning to our Q2 financial results. We did not recognize revenue in the Q2 of 2024 as compared to recognizing revenue of $2,800,000 in the Q2 of 2023. The decrease reflects last year's termination of Syros' collaboration agreement with Pfizer. R and D expenses were $22,000,000 in the Q2 of 2024 as compared to $29,600,000 in the Q2 of 2023.

Speaker 4

The decrease was primarily due to the reduction in external R and D consulting, contract manufacturing and a reduction in headcount and related expenses. Our R and D expenditures are now principally focused on the advancement of tannabarotene. G and A expenses were $5,500,000 in the Q2 of 20 24 as compared to $7,200,000 in the Q2 of 2023. The decrease was primarily due to a reduction in headcount and related expenses, consulting and facilities expenses. We reported a net loss for the Q2 of 2024 of $23,300,000 or $0.59 per share compared to a net loss of $36,300,000 or $1.30 per share for the same period in 2023.

Speaker 4

Cash, cash equivalents and marketable securities as of June 30, 2024 were $79,000,000 as compared with $108,300,000 as of March 31, 2024. We believe our current cash position will be sufficient to fund our anticipated operating expenses and capital expenditure requirements into the Q3 2025 bringing us beyond pivotal Phase 3 data from the select MDS1 trial and additional data from the randomized portion of the select AML1 trial. With that, I will turn the call over to the operator for questions.

Operator

Our first question is from Phil Nadeau from TD Cowen. Please go ahead.

Speaker 5

That's on progress and thanks for taking our questions. A few from us. First, in AML, when do you think you'd be in position to make a gono go decision on advancing Tami into a pivotal study in AML? Will the 40 patients we see in September be sufficient? Or would you want to see full data from all 80 patients in the trial?

Speaker 3

Thanks, Phil. David here to answer your question. So just to make sure all who are listening are caught up, we are planning on providing an update on our data from pre specified analysis of the ongoing select AML1 trial that will take place at the upcoming SOHO, that's the Society of Hematologic Oncology Annual Meeting in 2024 in September. And the analysis is intended to at this point include at least 40 patients who are contributing to the pre specified analysis. We'll likely have a slightly larger number of total patients available since the enrollment continued beyond that 40 patient milestone cut point.

Speaker 3

In terms of knowing what the go, no go and the timing for our sharing the plan, I think we really we need to see the data. We haven't analyzed the comparative results across the two arms and it's going to be very important for us to understand what they show for us to better plan what the next steps are and then communicate them out. So it's a bit premature for me to directly answer your question. I hope you appreciate that. And we will, as always, provide you with updates as soon as we can.

Speaker 5

And could you give us some sense of what you would want to see to decide to move on to a pivotal? What type of delta between the arms or anything else that's important in your decision?

Speaker 3

Well, as you know, we presented data at the end of last year that showed a 100% CRCRI rate, which included a very high rate of CRs. I think it was 78% of those were CRs. And that compared to the control arm of 70% CRCRI rate with 30% CR. So obviously, we were very excited about the magnitude of the complete response as well as the complete the CRCRI response. The difference between those two arms is going to be important and also understanding something about the quality of those responses in terms of their duration of the remissions will all contribute to the way in which we interpret those results.

Speaker 3

So again, we'll have the data in September. We'll be able to help share what they are and interpret them and provide the context for how we're interpreting them and you'll better understand what we have at that point in time.

Speaker 5

Perfect. That's helpful. And then second on MDS, you've been very clear on the path to commercialization here in the U. S. Can you remind us about Europe?

Speaker 5

Is there a path to commercialization in Europe? And what would be your plans for marketing the drug overseas?

Speaker 2

Yes. The U. S. Market is very focused and we continue to believe that building an efficient infrastructure will allow us to commercialize in the U. S.

Speaker 2

In Europe, as you know, it's much more fragmented. And so the idea is to license or find a partner in Europe to execute against that.

Speaker 5

Perfect. And then last question from us, just on the financials. Jason, it looks like the expenses were down this quarter. Was that timing of some expenses and we should expect expenses in future quarters to be more similar to the past? Or is this the new run rate?

Speaker 5

Have there been some cost cutting initiatives that minor cost cutting initiatives that have taken expenses down?

Speaker 4

Yes. I mean, at this point, Phil, as I've

Speaker 2

mentioned before, expenses have been coming down

Speaker 4

because we did a reprioritization. Getting to the getting to the MDS data and the AML data and then starting to prepare for commercial launch once we have data later this year. So think it's fair to say we're at a new kind of run rate on expenses relative to where we were in years past. We're being pretty judicious on expenses for obvious reasons at this point.

Speaker 5

That's very helpful. Thanks for taking our questions.

Operator

Our second question will be coming from Ted Tenthoff from Piper Sandler.

Speaker 6

My question, just maybe you can give us a reminder on Select in the really enjoyed the event that was just a couple of weeks ago and that's very useful. Remind us what the power is for the Phase 3 trials and what do you see as the delta needed to achieve that?

Speaker 3

Thanks, Ted. This is David again. If your question it was a little difficult to hear, but I think you were asking what to remind you what the powering was for the Phase 3. The primary endpoint is the CR8 in the select MDS1 and the study is powered to over 90% to show a difference in the CRH across the two arms. We've modeled the powering assumptions based on our 2:one randomization And the numbers of patients we need to achieve that power is about approximately 190 patients.

Speaker 3

We accomplished that enrollment back in the Q1 and we're anticipating having the pivotal primary readout by the middle of Q4 of this year. So we're really excited about that. The assumptions around how the arms would perform, we've assumed the standard performance for EASA for the control arm and the significant difference between those was what we took into consideration. We haven't publicly disclosed the numerical assumptions, but keep in mind that there's lots of things that goes into the final readout, which not only includes the CR, but the durability of the response, other secondary endpoints and the overall safety. So I think that we'll be able to share as much as we can at the time of our top line and we anticipate you'll have great context in being able to interpret the trials ultimate success as we remain hopeful.

Speaker 6

Great. Thank you. Looking forward to the data and then select MDS in the middle of the 4th quarter?

Speaker 3

That's correct.

Operator

Our next question will be coming from Jason Butler from CitizensJPM.

Speaker 7

Hi, it's Roy on for Jason from Citizens JMP. Thanks for taking our question. A quick one on select AML1 that updated SOPO. What duration of follow-up are you going to have for that data?

Speaker 3

So the study will be reporting on a pre specified analysis. We targeted that pre specified analysis to capture at least 80 excuse me, at least 50% of the 80 planned enrolled patients. So we would look forward to having at least 40. There likely will be a slightly larger number than 40 at the time of the report because there was ongoing enrollment subsequent to the date trigger for the pre specified analysis data gathering. And in terms of the length of time these patients were on study, these are all parts of the details that will be forthcoming in the September presentation.

Speaker 3

So obviously, the patients who were part of the study from the initial update that was provided back in earlier in the year will have had a larger opportunity to be followed relative to those who were more recently enrolled, but we will be reporting as much as we can at the time.

Speaker 7

Okay, great. And then a couple on select MDS-one. Do you have a target forum or a method for presenting the pivotal CR results in 4Q? And can you just give us enrollment status updates for the target patients for survival analysis?

Speaker 3

So, we'll be learning about the results from the blinded placebo controlled randomized trial by the middle of Q4 and we'll be sharing that as a top line in the ordinary fashion as it would be obviously corporate communication of some sort. We haven't specified the nature of any additional presentations or data sharing, but certainly at around that time, we'll provide you with as much information as we can. I will say the study has continued to enroll and we are seeing obviously continued great excitement and interest in the program since we achieved the enrollment target for the primary endpoint analysis. And we're making good progress is what I'm trying to say toward delivering the total of 550 patients for the survival secondary endpoint. That said, we haven't yet provided more specific information on the timing of the completion of that enrollment or the timing of that analysis.

Speaker 3

As you know, it's an endpoint driven analysis. And so it's obviously going to come at a later point in time than the CR analysis, but we haven't been more specific yet.

Speaker 6

Okay. Thank you.

Operator

Our next question will be coming from Lea Khan from Brookline Capital Markets.

Speaker 8

Good morning. My question is for David. I'm hoping you can give us some clarity and framework around MDS. So as we think about the high risk patients versus low risk patients, can you

Speaker 3

Sure, Leah. Thanks for that question. So the disease you could think of is divided into 2 categories of patients, lower risk and higher risk. Really what defines the lower risk patients is the prognosis. So they have a much longer time horizon until they evolve into a more serious life threatening disease.

Speaker 3

So the higher risk patients are closer to that point in time. So in general, the risks which are defined by the IPSSR, the International Prognostic Scoring System that was revised and published by Greenberg and Blood, details out what those are and we can certainly get that information to you if you want to look more specifically. In general, the symptoms of a low risk patient are related to anemia, and that's the prominent cytopenia that those patients will present with. So they'll often come to the doctor complaining of being weak and fatigued and they have anemia, but their blood looks unusual and they do a marrow and they diagnose dysplasia. And then the treatments are largely aimed and directed at red blood cell improvements.

Speaker 3

So some of the endpoints would be associated with hemoglobin concentration increases just specifically. Later on when you have higher risk disease, the disease is looking more and more like AML. As you know, those two diseases are on a continuum and they're very similar in that respect. And so there the problems relate to increased levels of bone marrow blasts and other blood counts that are impacted like the white cells in the plate. So those patients may have bleeding, infections as well as anemia or they may be having difficulties associated with AML like symptoms.

Speaker 3

And so the therapies there are largely focused on the endpoints around the complete response rate, which is why we chose that particular endpoint. As you know, the CR is a very important endpoint for MDS drug development because it provides an early read on the efficacy of a drug. It's closely correlated with overall survival. Hematologic improvement is a very important aspect of the endpoint definition. So when you improve the red count, the white count and the platelets, you then can claim you have a CR as long as the blasts have been reduced.

Speaker 3

So one would also expect an associated resolution of a lot of the symptoms that these patients have, which are infections, bleeding and fatigue. And that's why there's short term benefits to attaining a CR that and long term benefits with survival and that's why the regulators are supportive of its use in making a regulatory decision. So, I hope that helps answer your question. And as you can probably tell, I get very excited when I have a chance to talk about the patients and their disease symptoms and how we can fix them. So we're happy to take more if you have any in the future.

Speaker 8

Most helpful. And what I would infer from that just to make sure I'm on the right track here is that patients with high risk disease, you're trying to get their blast count down. So mechanistically, you'd be addressing the disease very differently than you would with a low risk patient where you're really supporting primarily the hemoglobin and potentially some other blood lineages, but it would be a very different treatment paradigm for these two distinct sets of patients. Am I right?

Speaker 3

I think that's a fair way to view it. There's similarities in some of the reasons why with low risk disease may have a low red blood count. There's a problematic clone of cells that are causing the problems with that are leading to anemia. But the therapies that promote increasing the red cell mass are largely the ones that are going to ameliorate the symptoms. They're not always going to be associated with delaying the development of leukemia, but you're treating what you have before you at the time.

Speaker 8

Thank you. Much appreciated.

Operator

I'd now like to turn the call over to Mr. Conley Chi for final closing comments.

Speaker 2

Great. Thanks, operator. Thanks everyone for joining us today and for all the great questions. We're looking forward to a very exciting second half of the year. And thank you again for all your continued support.

Speaker 2

And if you have any questions, please feel free to reach out to us. Have a great day.

Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. You all have a good one.

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Syros Pharmaceuticals Q2 2024
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