On Ausgt 6, 2015 Epizyme, Inc. (NASDAQ:EPZM), a clinical stage biopharmaceutical company creating novel epigenetic therapies for cancer patients, reported business highlights and operating and financial results for the second quarter of 2015 (Press release, Epizyme, AUG 6, 2015, View Source [SID:1234507072]).
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"As we enter the third quarter of 2015, Epizyme is in a strong position. Having regained global rights ex-Japan to tazemetostat, our lead clinical candidate, we are actively moving the program forward and expanding our clinical development activities," said Robert Gould, Ph.D., President and Chief Executive Officer, Epizyme. "The company made significant progress advancing tazemetostat during the quarter. Importantly, we initiated the phase 2 NHL study and completed the transition of development-related transition activities from Eisai. Beyond tazemetostat, we look forward to working with Celgene on the three HMT targets defined under our renewed collaboration agreement. We are on strong financial footing and are well positioned to advance the development of our clinical programs and platform. As we announced yesterday, we have selected Rob Bazemore to succeed me as President and Chief Executive Officer, positioning us for continued success into the future."
Program Summaries
Tazemetostat (EPZ-6438):
In the second quarter of 2015, Epizyme initiated a phase 2 monotherapy trial of its lead clinical candidate, tazemetostat, in patients with relapsed or refractory non-Hodgkin lymphoma (NHL). This five-arm study will enroll up to 150 patients with germinal center diffuse large B cell lymphoma (DLBCL) or follicular lymphoma, stratified by those expressing mutant EZH2 and those expressing wild type EZH2, as well as patients with non-germinal center DLBCL. The initial data from this study is expected in mid-2016.
The phase 1 study in relapsed or refractory NHL and advanced solid tumors is ongoing, with enrollment complete in the dose escalation and dose expansion cohorts. Enrollment in the clinical pharmacology portion of the study is ongoing. Epizyme will present updated data from patients with advanced solid tumors in the phase 1 study at ESMO (Free ESMO Whitepaper)’s European Cancer Congress in Vienna, Austria on September 26. Additional data from patients with NHL in the phase 1 study are expected to be presented at a medical meeting before the end of 2015. Results from the phase 1 trial presented at the International Congress on Malignant Lymphoma on June 20 showed tazemetostat as a monotherapy produced durable objective responses in heavily pre-treated patients with relapsed or refractory NHL, with an acceptable safety and tolerability profile.
Epizyme intends to initiate a phase 1 clinical study in pediatric patients with INI1-negative tumors or synovial sarcoma and a phase 2 clinical study in adult patients with INI1-negative tumors or synovial sarcoma in the second half of 2015.
Pinometostat (EPZ-5676):
Epizyme will voluntarily cease patient enrollment into the phase 1 study of pinometostat in adult patients with MLL-rearranged acute leukemia in the third quarter of 2015. The decision, made together with Celgene, is based on insufficient efficacy seen to date with monotherapy treatment in this population. The company expects to present final study results after all patients conclude treatment and data analyses are complete. A separate dose-escalation study of pinometostat in pediatric patients is ongoing and enrollment is expected to be completed in the second half of 2015.
Epizyme and Celgene plan to explore pinometostat in combination with other agents based on encouraging preclinical data.
Celgene collaboration update
Subsequent to the second quarter, Epizyme amended and restated its agreement with Celgene Corporation to extend the research collaboration between the two companies for at least three additional years. Epizyme received a $10 million upfront payment in exchange for an extension of Celgene’s option rights to individually license global rights for two histone methyltransferase (HMT) targets and ex-US rights for a third HMT target. Celgene may exercise its option with respect to each of the targets at the time of the IND filing for a pre-specified license payment. Following the completion of phase 1, if Celgene chooses to continue its license for a specific target, it may do so by making an additional pre-specified license payment.
Epizyme will be responsible for leading and funding development for each target candidate through phase 1 clinical trials. Epizyme may earn total potential milestones of up to $610 million on the three targets, including up to $75 million in development milestones and license fees, $365 million in regulatory milestones, and $170 million in sales milestones. Epizyme also may earn a royalty of up to a low double-digit percentage on worldwide net product sales relating to two of the targets, and on ex-US annual net sales relating to the third target. Epizyme retains global rights to the remainder of its preclinical pipeline.
Second Quarter 2015 Financial Results
Collaboration Revenue: Collaboration revenue was $0.7 million in the second quarter of 2015 and $1.6 million for the six months ended June 30, 2015 compared with $9.5 million and $22.9 million in the comparable periods of 2014. The decline in collaboration revenue primarily reflects the completion of our research obligations under the Eisai agreement by the end of 2014 and under the GSK agreement by January 2015, as well as a decrease in revenue recognized under the Celgene agreement due to the Company’s satisfaction of certain of its performance obligations under the agreement during Q4 2014.
R&D Expenses: Research and development expenses were $20.6 million for the second quarter 2015 and $77.6 million for the six months ended June 30, 2015 compared to $17.5 million and $32.8 million for the comparable periods of 2014. The expansion of tazemetostat clinical trials and related EZH2 activities and the $40.0 million upfront payment to Eisai in the first quarter of 2015 drove the increase in spending in comparison to the three and six months ended June 30, 2014. Epizyme expects development expenses will continue to increase in 2015 as compared to 2014 since the Company is now solely responsible for funding tazemetostat clinical trials and related development costs outside of Japan.
G&A Expenses: General and administrative expenses were $6.0 million for the second quarter 2015 and $11.2 million for the six months ended June 30, 2015 compared with $5.3 million and $10.3 million in the comparable periods in 2014. The increase in G&A expense was largely related to the increased infrastructure to support the expanding clinical development program and an increase in patent filings. We expect G&A expense to increase slightly as compared to current spending levels for the remainder of 2015.
Net Loss: Net loss was $25.8 million in the second quarter 2015 and $87.1 million for the six months ended June 30, 2015 compared with $13.4 million and $20.3 million in the comparable periods in 2014.
Cash and Cash Equivalents: Cash and cash equivalents as of June 30, 2015 were $236.7 million, compared with $190.1 million as of December 31, 2014. Epizyme’s follow-on public offering in March 2015 raised $117.0 million in proceeds before expenses and the exercise of the underwriters’ over-allotment option provided an additional $13.7 million in proceeds before expenses. The company received an upfront payment of $10.0 million under the amended and restated collaboration and license agreement with Celgene in July 2015. The company expects that, based on its current operating plan, cash and equivalents will be sufficient to fund its operating expenses and capital expenditure requirements through at least the end of the second quarter of 2017 prior to including any potential license fees or future milestone payments.
Shares Outstanding: Shares outstanding as of June 30, 2015 were 41.2 million. Weighted average shares outstanding were 41.1 million and 38.1 million for the three and six months ended June 30, 2015 respectively and 33.2 million and 32.1 million for the comparable periods in 2014.