Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) Q1 2024 Earnings Call Transcript

Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) Q1 2024 Earnings Call Transcript May 8, 2024

Syndax Pharmaceuticals, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, everyone, and welcome to the Syndax First Quarter 2024 Earnings Conference Call. Today’s call is being recorded. At this time, I’d like to turn the call over to Sharon Klahre, Head of Investor Relations at Syndax Pharmaceuticals.

Sharon Klahre: Thank you, operator. Welcome, and thank you all for joining us today for a review of Syndax’s first-quarter 2024 financial and operating results. I’m Sharon Klahre. And with me this afternoon to provide an update on the company’s progress and discuss financial results are Michael Metzger, Chief Executive Officer; Dr. Neil Gallagher, President and Head of R&D; Steve Closter, Chief Commercial Officer; Keith Goldan, Chief Financial Officer. Also joining us on the call today for the question-and-answer session are Dr. Peter Ordentlich Chief Scientific Officer; and Dr. Anjali Ganguli, Chief Business Officer. This call is accompanied by a slide deck that is posted on the Investor page of the company’s website. You can now turn to our forward-looking statements on slide 2.

Before we begin, I’d like to remind you that any statements made during the call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the risk factors section in the company’s most recent quarterly reports on Form 10-Q as well as other reports filed with the SEC. Any forward-looking statements made represent our views as of today, May 8, 2024, only. A replay of this call will be available on the company’s website, www.syndax.com following its completion. With that, I am pleased to turn the call over to Michael Metzger, Chief Executive Officer of Syndax.

Michael Metzger: Thank you, Sharon, and good morning, everyone, and thank you for joining us on the call today. I’d like to begin by welcoming Steve Closter to the call. Steve joined us in March as Chief Commercial Officer. He brings over 30 years of commercial experience to Syndax, which includes establishing winning teams and leading successful product launches. Steve is building on the excellent framework that was in place prior to his arrival, and we are already benefiting from his keen insights as we prepare for commercialization. In the quarter, we made significant progress on executing against our corporate strategy. As you can see on slide 3, we achieved several significant milestones this quarter, including securing priority review from the FDA for both revumenib NDA filing and the axatilimab BLA filing.

We also completed enrollment in the NPM1 AML cohort of Augment-101, pivotal trial, bringing us one step closer to expanding the market opportunity for revumenib. We look forward to reporting data from the initial trial in the fourth quarter of this year, which could serve as the basis for a supplemental NDA filing in the first half of 2025. These accomplishments set us up for an eventful 2024 that we expect will include two full US regulatory approvals, NPM1 pivotal data readout, additional combination data for recommended for revumenib in KMT2A and NPM1, initiation of a pivotal trial for revumenib in frontline KMT2A and NPM1 acute leukemia in combination with venetoclax, as well as the initiation of two combination trials for axatilimab in frontline chronic graft versus host disease.

As we approach our expected approvals, we are working to ensure that we are fully prepared to successfully launch at any time during the third quarter with an ability to reach all patients in need as rapidly as possible. Steve will provide additional details on our launch preparations later in the call. Syndax has a differentiated profile as a smid-cap biotech with two first and best-in-class drugs on the cusp of their potential first approvals. Notably, revumenib has a potential second significant indication and near-term expansion opportunity in relapsed or refractory NPM1 that meaningfully extends the target patient population in acute leukemia. This is unique in a launch year as it quickly broadens the market opportunity for revumenib in the relapsed or refractory setting to up to 6,500 patients.

Multiple opportunities beyond the initial relapse or refractory indication exists for both assets. And trials are ongoing that can drive significant long-term value for these franchises for years to come. We are well-funded with $522 million in cash as of March 31, that we expect will provide significant capital through 2026. Our current balance sheet not only supports our planned commercial launches and clinical trials, but also allows us to expand beyond our core registration indications and pursue select business development opportunities. I’ll now ask Neil to provide an overview of the pipeline. Neil?

Neil Gallagher: Thank you, Michael. In the first quarter, the NDA filing for revumenib of a highly selective menin inhibitor was granted priority review by the FDA for the treatment of adult and pediatric relapsed or refractory KMT2A rearranged or MT2Ar acute leukemia and issued a PDUFA date — target date of September 26, 2024. The filing is being reviewed under the Real-Time Oncology Review, which provides a more efficient review process and has historically led to earlier approval . The submission is based on data from the pivotal AUGMENT-101 trial outlined on slide 4 where single-agent revumenib induced a high percentage of blastfree responses in heavily pretreated KMT2Ar acute leukemia patients, thereby, enabling many of them to undergo potentially curative stem cell transplant and to continue revumenib monotherapy following transplant.

We’ve also completed enrollment in the final pivotal cohort of the AUGMENT-101 trial of 64 adult relapsed refractory NPM1 AML patients in March and expect to report the pivotal results from this population in the fourth quarter of this year. I’ll take a moment to review the Phase 1 data on slide 5 that underlines our confidence in the pivotal results for patients with relapsed or refractory NPM1 AML. Multiple presentations generated by us in both the relapsed or refractory and frontline settings have highlighted the consistency of menin inhibition across NPM1 mutations and KMT2A rearrangements, and we see the enthusiasm building for the revumenib in NPM1. The Phase 1 NPM1 data that we’ve reported supports our conviction that revumenib could be an important treatment for this AML population.

In the Phase 1 part of AUGMENT-101, 50% of NPM1 patients achieved an overall response and 36% achieved complete remission or CR with partial hematological recovery. And importantly, all patients with CR/CRh were MRD-negative. Consistent with the KMT2Ar population, revumenib also enabled a high percentage of NPM1 responders to proceed to transplant 43% and responses have been durable. This is despite many of the patients having failed prior venetoclax therapy and prior stem cell transplants. It’s worth noting that revumenib has been well tolerated in patients with relapsed or refractory NPM1 AML. In the Phase 1, there were no Grade 4 or 5 QT prolongation events, no patient experienced greater than Grade 2 differentiation syndrome, and no patients discontinued due to treatment-related adverse events.

We believe that revumenib will form the backbone of treatment for patients who have both KMT2Ar and NPM1 acute leukemias. Our clinical strategy extends beyond the initial relapsed or refractory populations and into the frontline and post transplant maintenance settings, including combinations of approved therapies. We have several combination trials ongoing with different standards of care across the continuum of patients, including in the fit and unfit settings that are listed on slide 6. Investigators presented data from multiple Phase 1 combination trials, including Beat AML, SAVE AML, and AUGMENT-101 during the American Society of Hematology Conference in December, demonstrating revumenib’s ability to safely and effectively combine with the standards of care.

We expect to provide updated data from these trials later this year. In the first quarter, we initiated another Phase 1 combination trial with standard-of-care intensive chemotherapy, also known as 7+3. Beyond acute leukemia, we are investigating the opportunity to expand to solid tumors. Our proof-of-concept signal seeking Phase 1 clinical trial in metastatic colorectal cancer is ongoing, and we expect to provide an update on the progress of the dose escalation phase of the trial later this quarter. Turning to axatilimab on slide 7. Also in the first quarter, the BLA filing for axatilimab or CSF-1R antibody was granted priority review by the FDA for the treatment of chronic graft versus host disease or chronic GVHD after failure of at least two prior lines of systemic therapy with the PDUFA date of August 28, 2024.

This submission is based on data from the pivotal AGAVE-201 trial for treatment with single-agent axatilimab led to an overall response rate or ORR of 74% with 60% of responders didn’t respond for one year. Importantly, axatilimab has a differentiated mechanism of action from currently approved therapies for chronic GVHD. It is the first investigation of chronic GVHD agent to target inflammation and fibrosis through the inhibition of disease-associated macrophages. We’re excited about the opportunity to expand axatilimab into the frontline setting in combination with standards of care and other fibrotic diseases where monocyte macrophage lineage plays a key role, including idiopathic pulmonary fibrosis or IPF, where we are currently enrolling a Phase 2 clinical trial.

The team has been working hard to increase awareness of the compelling regimen of AUGMENT-101 and the axatilimab AGAVE-201 data ahead of the respective potential approvals. In April, investigators presented pediatric data from AUGMENT-101 in a plenary session of the American Society of Pediatric Hematology/Oncology that further supports the consistency of the data across subgroups. Also in April, investigators presented additional analyses from AGAVE-201 at the European Society for Blood and Marrow Transplantation Congress highlighting axatilamab’s impressive clinical activity in fibrosis-dominant organs, which, as I mentioned earlier, is a key point of differentiation. We have ambitious publication plan underway, and we look forward to detailing more of the clinical benefits of axatilimab and revumenib to the prescribing community.

I’ll now turn the call over to Steve to talk about preparation for a planned commercial launches on the market opportunity. Steve?

Steve Closter: Thank you, Neil. This is an exciting time to be at Syndax, and we’re looking forward to launching two first-in-class and meaningfully differentiated agents this year. As Michael indicated earlier, we’ll be ready to launch revumenib and axatilimab in the third quarter. And we’ve made significant progress so far this year to prepare ourselves in the market to realize the full potential of these medicines for patients or health care professionals and the company. Our key focus areas are highlighted on slide 8. Our pre-commercialization strategy has focused on developing an efficient, effective, and purpose-built infrastructure to support the business and prioritize relationships with important external stakeholders [Technical Difficulty] and the health care provider as well as the payer space to accelerate uptake at launch.

For revumenib, our prelaunch activities have been centered around disease awareness, mechanism of disease education, and market access, as well as ensuring patient support services are in place at the time of launch. The customer facing leadership team has been in the field for some time and focus on disease state awareness and building relationships with health care providers. The team is actively profiling accounts, understanding workflows and identifying the patient journey at the largest and most influential academic centers in the country. This has allowed us to have important conversations with health care providers and other health care organization decision makers and gained valuable insights on the market, which has helped us define our outreach strategy.

We launched a non-branded campaign last year, focused on improving the knowledge and understanding around the role of menin inhibition across key segments of acute leukemia, including KMT2A rearrangements, as well as follow-on indications like NPM1 AML. This effort will expand as we approach a potential launch. We’ve recruited a talented and highly experienced sales team with an average of 22 years of experience, primarily in hematology/oncology with an average of six product launches per representative. This is obviously a very experienced group with existing relationships and proven past success. The customer facing field team will play a multidisciplinary role in supporting health care professionals and patients. With regard to market access, our team has been educating commercial and Medicare payers on the burden of relapsed or refractory acute leukemia to prepare them to conduct timely and evidence-based reviews and ultimately access decisions upon potential FDA approval while formulary approval builds over time.

We have little doubt that revumenib will be covered for reimbursement, while plans to review the product for formulary inclusion. We’ve been meeting with pharmacy benefit managers and payers since 2023, sharing relevant market and product information and expect to reach plans covering more than 90% of all lives prior to revumenib’s anticipated approval. Payers are telling us that they recognize the significant unmet need in KMT2Ar acute leukemia patients and the benefit that revumenib could provide as supported by the AUGMENT-101 data. This is important due to the acute nature of the disease and the high mortality and morbidity in relapsed or refractory KMT2Ar acute leukemia, making the urgency to treat quickly absolutely critical. I’m excited about our progress to date and look forward to sharing more about our ongoing efforts in the future.

Turning now to slide 9, KMT2Ar and NPM1 acute leukemias represent up to 40% of all AML patients. And there are no FDA approved targeted therapies for this population. We believe relapsed or refractory KMT2Ar acute leukemia alone represents a total addressable market of approximately $750 million in the US. The annual incidence of KMT2Ar acute leukemia is about 2,600 patients and the majority are refractory to front-line standard-of-care treatments. We estimate a median duration of therapy across the treated population of approximately nine months, and we believe the clinical data supports pricing competitively to other targeted therapies in AML, such as the FLT3 or IDH inhibitors. Physicians we’ve spoken with indicate an eagerness to prescribe revumenib early during an eligible patient’s treatment journey to bring more patients to transplant and then extend responses by continuing with revumenib line of therapy following transplant engraftment.

We expect that our first mover advantage and the early experience physicians will gain treating patients with revumenib will be vitally important to the long-term success of our brand. Our significant market share is likely to extend meaningfully beyond KMT2Ar, especially as we will be the first to deliver meaningful pivotal data in other indications such as NPM1 AML. We estimate that the two distinct market segments in acute leukemias, KMT2Ar and NPM1 available accessible population of 5,000 to 6,500 patients in the relapse or refractory setting and an addressable market opportunity that approaches $2 billion in the US. Turning now to slide 10, approximately 14,000 US patients suffer from chronic GVHD, 50% of whom require treatment beyond second line due to disease progression, inadequate response, or disease manifestations that aren’t wholly addressed with current treatments.

There are no cures for this advanced chronic GVHD patient population. Patients initially treated with corticosteroids are then cycled through a variety of additional therapies based on the physician’s experience and manifestations of the disease being addressed. The successful commercial launches of Jakafi and , and importantly, the speed by which both these agents gained adoption really speak to the unmet need in chronic GVHD. We also know that despite these recent advances, the disease is still inadequately treated and physicians are looking for an agent that can better address the underlying fibrosis that ultimately leads to organ damage. Further, they are excited to have a drug with such a fast onset of action and impressive durability of response.

These key points of differentiation should enable axatilimab to carve out a sizable commercial opportunity within the estimated $1 billion US refractory chronic GVHD market. As you know, Incyte is our partner for axatilimab and really the leader in the GVHD space. As of last year, we exercised our option with Incyte to co-commercialize axatilimab in United States and provide 30% of the commercial efforts as we believe there is a considerable benefits of [indiscernible] two products simultaneously to a highly overlapping and targeted physician prescriber universe. We’re working closely with Incyte to develop our go-to-market strategy for axatilimab and plan to align more fully with Incyte before sharing additional details. However, we expect to follow a similar set of strategic imperatives as we’ve just outlined for revumenib.

Now I’ll turn the call over to Keith to review our financial results.

Keith Goldan: Thank you, Steve. Turning to slide 11, as Michael mentioned earlier, the $522 million in cash equivalents and short- and long-term investments on our balance sheet at March 31, expected to provide runway through 2026. Our financial strength allows us to appropriately invest to maximize the value of our pipeline, and importantly, to transition into a commercial stage organization this year. Turning to the income statement, operating expenses in the first quarter was $79.5 million, comprised of $56.5 million of research and development expense and $23.0 million of selling, general, and administrative expense. Keeping in mind that we’ve always embraced a disciplined approach to resource allocation, we’d like to provide financial guidance for the second quarter and full year of 2024.

For the second quarter, the company expects research and development expenses to be $50 million to $55 million and total operating expenses to be $80 million to $85 million. For the full year 2024, there is no change to the existing guidance, and the company continues to expect research and development expenses to be $240 million to $260 million and total operating expenses to be $355 million to $375 million. Note that the guidance range for operating expenses for the full year 2024 is inclusive of an estimated $43 million of non-cash stock compensation expense. And preparing for launch, I want to take a minute to lay out how we plan to recognize revenue for axatilimab. Slide 12 includes an illustrative example of accounting for sales of axatilimab and is not intended to provide any margin or other guidance.

Commercially, our partnership with Incyte is a 50/50 split of the economics in the US. We will report 50% of revenues earned, net of cost of sales and commercial expenses. During the period where there is a net commercial profit for axatilimab, as in the top example on this slide, our 50% share of the net profit will be recognized on our P&L as collaborative arrangement revenue. During a period where there’s a net commercial loss for axatilimab, as in the bottom example on this slide, our 50% share of the net commercial loss would be included in operating expenses designated as a separate line item called share of collaboration loss. We also have various future US commercial and regulatory milestones owed to us from Incyte that would be recorded as partnership or milestone revenue on our income statement.Development expenses are shared 55/45 in the US and our 45% share is included in the income statement as part of R&D expense.

Outside of the US, Incyte is responsible for 100% for the development and regulatory expenses, and we are entitled to receive a milestones plus royalties on ex-US sales. With that, let me now turn the call back over to Michael.

Michael Metzger: Thank you, Keith. As you’ve heard during the call, 2024 is shaping up to be a historic year for Syndax as we prepare to launch two first-in-class products. And I’m confident that we have the expertise, resources, and determination to bring these products to market. As an organization, we are truly excited to evolve into a commercial organization, and we are laser focused on bringing these important treatment options to patients in need. On slide 13, we lay out our key upcoming milestones for the balance of the year, and I look forward to updating you on our progress in the coming months. As always, I would like to express my sincere appreciation to the Syndax team, our collaborators, and most importantly, the patients, trial sites, and investigators involved with our clinical programs.

Through our work and dedication, we are getting ever so close to delivering on our mission of improving the lives of patients with cancer. I’d also like to thank our committed, long-term investors who continue to share in our vision and support us in building Syndax. With that, I’d like to open the call for questions. Operator?

Operator: [Operator Instructions]. Our first question is from Peter Lawson at Barclays.

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Q&A Session

Peter Lawson: Just first question is around how important NCCN guidelines will be for new additional indications after you get the initial approval for revumenib.

Michael Metzger: Peter, thanks for the question. Maybe I’ll ask Neil to comment on the importance of the guidelines.

Neil Gallagher: Yeah. Thanks, Peter. So as you know, the first approval — we’re anticipating that the first approval for revumenib will come in the third quarter, and that will be for KMT2A rearranged acute leukemias in adults and children. So the approval will be — should be sufficient to actually have that indication included in the guidelines. And in addition to that, we’ve also guided to the fact that we will — in fact, I referenced agenda — prepared remarks that we anticipate reporting pivotal data from the NPM1 cohort by the end of the year. So suffice to say that we have a plan. I mean, prior to approval, presentation at medical congress along with publication of the data could position us to at least start conversations with the NCCN committee regarding inclusion in the guidelines, as you’re aware the committee meets twice a year.

These disease-specific committees meet at least once a year, but they also meet ad hoc, once important new data become available. So we’re considering all of that. And clearly, we want to make sure that the best possible information is made available to the committee as well as to prescribers when we publish our data.

Peter Lawson: And then as we think about expansion of revumenib to solid tumors, kind of, just if you could detail the expectations around the CRC data — that’s still 2Q, when we should expect to see that data at medical conference and number of patients?

Neil Gallagher: Thanks, Peter. Thanks for the follow-up. So question was related to solid tumor is in our plans there. And as we’ve disclosed and mentioned in the prepared remarks, we are continuing to work in the area of colorectal cancer. This is metastatic colorectal cancer, third line, plus these are — and we are conducting a Phase 1 trial. We had said that we had planned to disclose some information, update everyone on our progress there in the second quarter, and that remains to be the case. Let me remind everyone, this is a dose escalation trial. So this is roughly 10 to 20 patients heavily pretreated. And what we’re essentially looking for — looking to see is activity of revumenib again in this patient population, looking for prolonged stable disease in four to six month, so call it, a range with perhaps around 15% of the patients in that stable disease category.

So that’s the signal that would be — we think impactful. Of course, patients don’t do very well in this setting. And certainly, standard of care doesn’t yield prolonged stable disease of that nature. So we’ll obviously update when we’re ready to do so in the second quarter.

Operator: Our next question is from Anupam Rama at JPMorgan.

Anupam Rama: Hey, guys. Thanks so much for taking the question. Maybe a quick one for Stephen. Just wondering, you know, before you join Syndax and you doing assessments for the opportunities for revumenib and axatilamab, what really attracted you to these products? And then the second one is also actually for Stephen, you mentioned very broadly what some of the levers for success in slide 8 are for both of these launches, but anything more specific to revumenib in KMT2A that you’d highlight? Thank you so much.

Steve Closter: Yeah, thanks for the question. I’ll answer both. First is why did I probably come here. And it’s truly a combination of things. I’ve been pretty careful over the course of my career, and I think this is my fourth organization in 30 years, so the bar is pretty high. I look at all opportunities in three different factors. The first is that needs to be great products, product set, addressed unmet need, products that have a great amount of clinical data, and really provides differentiated attributes. And I think both revenueand axa have that. I knew that coming in. And as I’ve seen the data and as I’ve reviewed lots of market research and actually engaged with KOLs, that’s only been amplified. I think the second thing that I really think about is really who I work with, right, wanting to be a companies with great people and great leaders.

And that’s exactly what we have here. Michael, the entire , the Board are all top-tier, very supportive. And even walking in the commercial leadership team that was in place was strong as well. And the third thing for me is really the willingness to invest and plan for success, and we have that here too. So I’d say my expectations have been exceeded coming in and I’m more excited now than I was even before I started, I think I mean, we . The second question is really around levers for success on revumenib. There’s a lot we’re building as a commercial organization and all of that will be in place. I think as Neil mentioned and Michael mentioned in his remarks, we’ll be ready in Q3. So infrastructure processes, all those things will be done. I think from a strategic point of view, well, the three things that I think about that we are very focused on, really the first is the population of patients is limited.

We know that, righ? And that opportunity will grow over time, but finding them is critical. Patients are fragile. They need treatment immediately. So we’ve got focus there. I think the second thing is just the landscape of health care delivery. There’re multiple stakeholders out there that deliver care to patients. Physicians, nurses, advanced practice providers, pharmacy, reimbursement, pathology, you name it. We have a customer-facing footprint that will address and directly engage with that dynamic. And the third piece, third point is really access, sight? Neil mentioned NCCN guidelines, which will be important. Payers are looking for that. They’re looking for other published data. The patients need access to treatment. So we’ve been deployed against the payer space for some time on calls directly with payers, and that is in an effort to really expedite formulary review.

And in addition, we’ve built a support program to meet the needs of patients, which we know their need. So thanks for the question. I hope that was a good answer.

Operator: Our next question is from Brad Canino at Stifel.

Brad Canino: Hi, good morning. Relating to the plan for the pivotal ven/azac combo trial to be initiated by year end. This will move the emphasis of clinical endpoints from CR towards remission, durability, and OS. And I want to ask how does the company plan to evaluate data from the uncontrolled trial updates later this year, both from the combos and also the NPM1 pivotal monotherapy, in order to gain confidence in the randomized endpoints for the frontline pivotal? Thank you

Michael Metzger: Brad, thanks for the question. I’m going to turn it over to Neil to address that.

Neil Gallagher: Yeah, thank you for the question. I mean, all of this combination studies that we reported on the one specific, scenario. In other words, initiating the Phase 3 revumenib ven/azac study by the end of the year is the Beat AML study. And as you’re aware, we — the group reported data around the ASH meeting last year and anticipate updating those data during the course of this year. Those data are exciting, not only to the company, but also to the investigators and actually not just the Beat AML investigators, but the broader community. So people are highly enthusiastic, when initiating the Phase 3 study. Just to remind you the response rates, including the CR/CRh rates that were observed and the Beat AML studies to date have exceeded the historical controls observed in , including in terms of CR, in particular, molecular MRD-negative CR was much, much higher in the Beat AML study compared to VRA.

So the emergent data, including the observation that revumenib is highly combinable. It’s not adding. It doesn’t appear to be adding toxicity to the backbone therapy as well as being — providing incremental efficacy in the target patient population. And that’s bolstered also by the observations from, for instance, SAVE. The SAVE study, which is a combination of revumenib with venetoclax and/or azacitidine in a relapsed refractory setting as well as our own AUGMENT-102 trial, the combination trial, with relapsed refractory population in combination with chemotherapy. So the body of the evidence is that revumenib is combinable with backbone standards of care is not adding toxicity. In the target population for the Phase 3 trial in the newly diagnosed unfit population, the BAML data providing evidence that revumenib is also adding in a notable efficacy through the backbone therapy.

So obviously, we will be having conversations with health authorities as we design the trial. We don’t typically comment on those, but we look forward to presenting more details around the study prior to initiation later in the year.

Operator: Our next question is from Phil Nadeau at TD Cowen.

Phil Nadeau: Morning. Congrats on progress. Thanks for taking our questions. A few for us. First, in terms of the Phase 2 doses in the combo trials or validating the Phase 2 doses in the combo trials. This morning’s press release notes that some of the trials have been expanded to validate the Phase 2 doses. Just curious whether you’d be willing to disclose whether the full monotherapy dose of revumenib is being used in those combinations at this point?

Michael Metzger: Neil?

Neil Gallagher: Yeah, thanks for the question. So I’ll just remind everyone the 3 studies that I just referenced and the three — and answer to the previous question are the studies under discussion. So I won’t repeat what those are. In all three of those studies — in all three of those trials, there are two doses of revumenib that were investigated: 113 milligrams and 163 milligrams. 163 milligrams is the presumptive monotherapy dose in combination with the strong that will be included in the label. So revumenib has been given at full dose in all three trials. By the time we talked about them at the event around the ASH last December, in all three, the dose-limiting toxicity windows for both doses have been cleared and both doses are being expanded in all three trials at this point in time.

So we haven’t — when we talked about RP2D, we’re continuing to characterize the two doses. But in general, our anticipation is that revumenib — our observation to date is that revumenib is combinable at full monotherapy dose with backbone standards of care.

Phil Nadeau: That is very helpful. Thank you. And then second question, based on the milestone tables that you just presented, it doesn’t seem like you’re anticipating an advisory committee review for either revumenib or axatilimab. Is that accurate? And can you remind us did the FDA explicitly, say, in acceptance letters that would not be necessary for both drugs?

Michael Metzger: Yes, Phil, thanks for the question. And I think our expectation is that neither axatilimab nor revumenib will require an AdCom, but we haven’t explicitly stated or nor do we comment on regulatory correspondence from the agency relative to things like that. So but that is our expectation that neither will need an AdCom.

Phil Nadeau: Perfect. Then last question from us, you referenced the nine months expected median duration of use for KMT2A patients, can you remind us what proportion of patients go into transplant is assumed in that nine-month figure?

Michael Metzger: Phil, thanks for the question. It’s roughly about a third of that half, right — of the patients that go transplant.

Phil Nadeau: So a third of patients who get a relapse refractory line or go to transplant is the assumption?

Anjali Ganguli: Yeah, Phil, it’s Anjali. I think what we’ve been saying is there’s usually three groups of patients that seem — based on the trials seem to all be about an equal sized population. There were a third of patients that did not respond. Of the two-thirds of patients that responded, half went to transplant. So overall, the entire population is third that go to transplant.

Operator: Our next question is from Michael Schmidt with Guggenheim.

Michael Schmidt: Hey, guys. Good morning. Thanks for taking my questions. I just had one on the axatilimab launch, now that we’re obviously closing in on the PDUFA date later this year. And as we think about the $1.5 billion to $2 billion opportunity in a relapsed refractory setting, just wondering how we should think about perhaps the early launch trajectory, subsequent approval? Are there any good proxies we should look at, for example? And then, what are your expectations for potential off-label use in the NMP1 subset. Obviously, we will have data later this year. Could that help next year to accelerate the launch early on? Thanks so much.

Michael Metzger: Yeah, Michael, thank you for the questions. I’m going to ask Anjali to comment on the launch.

Anjali Ganguli: Yeah, thanks, Michael. No, we’re really excited about this opportunity. I think what revumenib has been — certainly, this is a very unique situation. As you know, we got through the clinical development in record time, first patient dose to NDA filinng in four years. We generated data that support indications across AML and ALL, adults and pediatrics. And as you said, we’re anticipating an approval in the third quarter of this year, and we’ll have data for another very important patient population treated by the exact same set of health care providers in a disease where physicians can choose the best options for their patients. And then on top of that, we also talked about all the combination data we’ve generated with revumenib that allow them to think about multiple ways to use this drug and fit it into their treatment plans as they think best.

So I think we have a very unique launch curves that we’re going to be generating in real time. I don’t think there’s a perfect analogue that addresses all of these aspects of what’s coming in the next 12 months. But we have seen very significant excitement around revumenib around this new class of agents and how they can utilize it to bring care to patients that have had nothing. And I think you’ll recall the last two ASH meetings have been very focused on the data that we’ve been generating. And I think that shows how much education is already out there. And Steve talked about, there’s a lot more that we’re doing to make sure everybody’s aware of the drug or the support and patient support is in place to allow utilization. And we’re really excited to have a really strong launch of revumenib.

Michael Schmidt: Maybe just a follow-up. Can you just remind us what percentage of the AML market is under Medicare? And how do you think about pricing in the Medicare population or any sort of expectations for free drug programs as we think about the early launch again later this year?

Michael Metzger: Yes. Let me ask — thanks, Michael. Let me ask Steve to comment on those questions.

Steve Closter: Yeah. I mean, it’s a good question. And the payer space is different for KMT2Ar versus NPM1. It will be more of a commercial patient for the KMT2A launch just based on the age of the patient. We’ll expect coverage honestly at launch. Formulary acceptance will happen overtime, right? Typically, takes six to nine months for that to happen. But in the meanwhile, for health care providers, their staff are very fluent on how to get through the medical exception process. That’s where the NCCN guidelines are helpful and all the other published data, Medicare payers will be less important for KMT2Ar but for NPM1 patient population, which is a little bit older, it’s going to change. So our approach has been really over the last nine months, even a year is really to to all plans.

We’ve been delivering a and information exchange, if that’s the preapproval information exchange. So we’ve had some very good interactions with payers. They recognize the unmet need and the criticality of patient care, I think, is largely set its unique launch where you’ve got a launch followed by what seen other launch in a year. So we’re prepared for both at the same time. It takes time to build coverage. So we’ve got the whole payer space. I think, in my prepared remarks, we will talk to payers that cover 90% of covered lives in this country, which is as good as it gets, in advance of approval. So we’re prepared for success.

Michael Schmidt: Okay, great. And then maybe just a housekeeping question. As we think about the time of filing and potential approval, are there any milestones due from Incyte for that that we should incorporate in our models this year?

Michael Metzger: Yes. Thank you, Michael. Keith?

Keith Goldan: Yeah, Michael, we do — as disclosed in this Q and as we’ve disclosed in past Qs and Ks, we do have not only development regulatory milestones, but commercial milestones to us from Incyte. Total milestones for development regulatory under the agreement were $220 million. Total commercial milestones were $230 million. So a total of $450 million due us. You can expect those to come at major — certainly major regulatory events such as approval. I think that’s a reasonable expectation. But we haven’t been more specific as to the amounts.

Operator: Our next question is from Yigal Nochomovitz with Citigroup.

Yigal Nochomovitz: Yeah, hi. Thanks very much for taking the question. Just on NMP1 regulatory pathway [Technical Difficulty] breakthrough or given sNDA, is that — are those options not really necessary?

Michael Metzger: Yigal, thank you for your question. You broke up a little bit, but I think I captured it. So as you know, we’ve had breakthrough therapy designation for KMT2A. For NPM1, we have the opportunity to potentially get breakthrough therapy, probably most importantly, your first indication. and I think the engagement around KMT2A and the molecule and the submission package has been very strong. We have priority review as well. I think for NPM1, we’ll look to leverage some of the same access points with the agency. But we’re, I’d say, pretty well advantaged by what we’ve — what’s come our way already. But I will say we don’t generally comment on regulatory strategy, but the opportunity to submit for BTD at a point in the future is open to us.

So I think it’s obviously a program that we’ll have data on later this year. We’ll have a submission, we hope, by — in the not too distant future beyond that and then look to get the drug approved in 2025. So that will be through an sNDA process. So it’s all, I’d say, call it an expedited pathway through some of the designations we have in hand already or some of the things that we may avail ourselves in the future.

Yigal Nochomovitz: Okay, thanks. And then when you think more broadly about the revumenib in terms of the spectrum of care in AML, both in the frontline and in relapsed refractory, and given the fact that there’s a good chance that you’re going to be initiating a pivotal trial in the frontline in combo with venetoclax. When you start to think about the commercial build there, are you making assumptions around the potential pretreatment revumenib for patients that received revumenib in the frontline in a combination setting, whether it be with [indiscernible] or perhaps even with the 7+3, including those patients in the builds for revumenib in a relapsed refractory setting? Or once they are treated in the frontline, that wouldn’t be a part of your assumption set? Thank you.

Michael Metzger: Yes, thanks, Yigal. I think our assumption is that once you’re treated with revumenib, at least from our vantage point, the way we see it today, I think once you’re treated with the — in the frontline setting, it’s less likely that you’re going to be treated in the relapsed refractory setting, again with another revumenib inhibitor. And Neil, do you want to make a comment?

Neil Gallagher: Yeah, I agree with Michael’s comments there that I think that it is a little bit nuanced because I think longer term or I can foresee situations where patients could, for instance, have either been treated and relaxed along time later on NMP1 [Technical Difficulty] positive or came to a positive market might be very exposed. But I think, in general, I agree with Michael’s points. We shouldn’t be expecting a lot of patients to [indiscernible]

Yigal Nochomovitz: And just one on axa, do you have any timelines for the IPF trial in terms of enrollment and data?

Michael Metzger: Thanks, Yigal. No, not at this point. I think we are enrolling. As you know, we started recently bringing up sites and enrolling patients, and it’s going nicely. And so we’ll have more to say in terms of milestones, both for enrollment as well as data as we get further into the year, maybe into next year.

Operator: Our next question is from Kalpit Patel with B. Riley Securities.

Kalpit Patel: Can you comment on what proportion of patients that you estimate might be eligible to receive revumenib as a maintenance treatment after induction and consolidation. I’m trying to understand if that median duration of treatment in that specific frontline setting would be higher than the nine months that you expect in the relapsed refractory setting. Thank you.

Michael Metzger: Yeah, thanks for the question. I think if I interpret your question correctly, I think in terms of patients who would be eligible for maintenance going in the relapsed refractory setting. I think if you’re getting — if you had a successful transplant, there’s no reason that all patients wouldn’t necessarily be eligible. They need to have — be stable and graft well, and I think that usually the first step in pitching the physicians, remind us of that that there’s an engraftment period. But for all intents and purposes, all patients should be eligible for maintenance. So I think that’s our assumption. And that’s, I think, been discussed with physicians on an ongoing basis. I think when you get to the frontline setting, the assumptions for long-term maintenance and how that would play out in the fit population could very well differ if you are able to get to patients earlier and treat them successfully through transplant and put them back on therapy.

I think the expectation is treat patients earlier they stay on — they do better and they stay longer and so that should change how the assumptions work on the time on maintenance in the frontline compared to relapsed refractory. We don’t have a good estimate of that yet. Obviously, we’re generating that data. But over time, we’ll understand that a little bit better.

Operator: Our next question is from Jason Zemansky with Bank of America.

Jason Zemansky: Perfect. Thank you. Good morning and congratulations on the progress. Appreciate you taking our questions. Regarding the commercialization plans for revumenib and your initial outreach, I have to imagine there’s already quite a bit of excitement across at least the more academic-focused community. But what sort of division between rapid adopters and non do you expect? How quickly do you expect maybe the more community-based prescribers to come on board as far as awareness and education goes? And maybe bolus isn’t quite the right descriptor, given patient dynamics this late in treatment, but do you expect an initial large bump in patient numbers or more of a straight line uptake?

Michael Metzger: Jason, thank you for the question. I’m going to turn it over to Steve to address your questions.

Steve Closter: Yeah, hey, Jason. Thanks for the question. I mean, there’s a lot of excitement. I think predating, coming to the company, the company has done quite a bit of research, market research, advisory boards, and that with KOLs and the field medical team has been out there. So there’s a lot of, well to say, demand that’s there because of lack of treatment options. I’ve recently — I actually was out in New York yesterday at Cornell and and meeting with KOLs, so they’re ready for the drug. Literally cannot wait till it hits the market. So I think certainly the academic centers, Jason, there will be quick uptake. They are ready for this product. Awareness is already fairly high, whether it’s revumenib or menin inhibitor.

I think downstream, in the community, it’s going to take a little bit of time. Part of it is just they may not see a lot of patients initially. So it’s up to us to be there. So from a commercialization standpoint, we’ll have a adequately sized team that’s going to cover 95%-plus of the opportunity. I will have a nonpersonal promotional program that will reach folks in places that we may not be at as frequently. So I think you’ll see quick uptake across the board. And a lot of it’s just patients in the office ready to be treated. Leads to your second question, and there’s not going to be much of a bolus. We have an EAP that’s in place. I can’t give the number, but it’s a certain number of patients. No one’s withholding treatment for eligible patients, to your point.

The criticality is just too high. So it will be a little, I will say, actually initially coming EAP, that will burn out over the beginning months of the launch. And then after that, we’ll expect the typical uptick just based on our assumptions and available patients.

Jason Zemansky: Got it. Makes sense. And then maybe just a quick follow up on your Phase 1 and metastatic colorectal cancer. In terms of the go, no-go decision, I know you mentioned disease stabilization as important, but was curious, is there a specific signal, I don’t know, maybe a biomarker what you’re looking for in terms of menin’s potential or hypothetical role in driving solid tumors that would just make you feel confident about investing significantly in this potential expansion opportunity?

Michael Metzger: Jason, thanks for the follow-up on CRC. I’m going to turn it over to Neil to address.

Neil Gallagher: Yeah, thanks. And so in the part of the study that has been conducted to date, I just — to reiterate Michael’s point, this is primarily the safety part of the study. We are looking at in addition to clinical responses, I mean, primarily, it’s a safety study. We’re also looking at clinical responses. We’re also looking at biomarker data. And anticipation is that as we get to a point in the future where we could make a decision on future development in this space, but this to be taken into consideration. We haven’t specifically set colorectal data we’re looking at, but at some point in the future, we will provide more details around it. I wouldn’t expect necessarily too much data in in our update in the second quarter, for instance, colorectal data. But rest assured that we are pursuing colorectal studies. And as I said, we’ll take the totality of the evidence into consideration.

Operator: Our next question is from Justin Zelin with BTIG.

Justin Zelin: Thanks for taking the question and welcome to Steve. So ahead of two launches this year, I wanted to ask how large of a sales force you’re looking to build here. And could you talk to the overlap of providers who treat both leukemia and chronic graft versus host disease from promotion of both products?

Michael Metzger: Sure. Maybe I’ll let Steve take that question.

Steve Closter: Yeah, I appreciate the question, Justin. In terms of salesforce size, we’re not prepared to provide the exact color and size of the team. But it will be a team that I think can really address customer needs. Our goal, whether it’s providers or anybody within the health care delivery system that it’s a great customer experience. So we’re prepared to link up to all different aspects of health care organizations to make sure we’re meeting the needs and supporting providers in their treatment of patients. So I think I use the term plus 95% coverage. So we’ll cover the opportunity. There is no doubt about that. In terms of overlap between on GVHD and rev, there’s high overlap. I mean, we’re likely along with Incyte calling on the same treatment centers, right, whether it’s treatment of AML or treatment of transplant, and we’ll leverage that call point.

Yeah, there’s probably a third overlap right now of our rev audience with the axa audience. We’ll obviously provide 30% of the effort. So we’ll leverage our footprint and we will cover the market opportunity in really both opportunities.

Operator: Our next question is from Chris Shibutani with Goldman Sachs.

Chris Shibutani: Thank you. Good morning. A lot of questions on the focus have already been asked. So perhaps if I can ask a bigger-picture, longer-term question, it ties a little bit to your guidance in terms of operating expense spend on R&D. The near term question is it looks as if to reach your full-year guidance, we’ll have a considerable step-up in the second half. Is that primarily attributed to the combination studies. just to give us a sense there, Keith? And then secondly, , I think you’ve done a tremendous amount of work in building this portfolio and the company is now very focused on trying to launch two products but as you know, investors are impatient to trying to figure out what to come next. What is your thought on capital allocation priorities further business development? What are you seeing out there. What’s your appetite? Thank you.

Michael Metzger: Great. Thank you, Chris. Good questions. Maybe, Keith, you want to take the first one on the longer-term?

Keith Goldan: Yeah, sure. So Chris, I wouldn’t necessarily agree that it’s a big step up, to use your words. We did — total operating expenses in 1Q approached to $80 million. The guidance range from second quarter is $80 million, $85 million. So if we were just to stay on that trajectory, we’d be $320 million-ish. So there is some increase that I think we would anticipate in the back half of the year. And I think, yes, certainly as PF ramps as the first line 7+3 combination trial with ramp continues to accrue and as we get ready to launch the pivotal Phase 3 ven/aza combo trial with rev, that’s certainly going to add to some of our R&D expenses in the back half of the year. But also don’t forget, we’re building out a commercial organization. So on the SG&A side, we would expect still some growth there for the sales force of the customer-facing individuals that Steve commented on earlier, as well as the G&A support for field force.

Michael Metzger: And in terms of your second question, Chris, on business development, maybe I’ll start and turn it over to Anjali. So look, I think our strategy has been — and we’ve been pursuing the same business model for quite some time, which is to in-license and develop new molecules with differentiated profiles. I think we’ve been fortunate to have great success with our in-licensing strategy and having these two molecules that are nearing approval. And so the bar is always quite high with regard to new opportunities and it gets incumbent upon us to be thoughtful about how we allocate capital. And so we do think that additional molecules bringing them into the pipeline, backfilling the earlier part of the pipeline is quite important. And we are interested in doing that. And so, I don’t know, if Anjali want to make a comment on our activities, but we remain quite disciplined about what we’re doing.

Anjali Ganguli: No, I think you said it well, Michael. We’re very actively engaged in the market looking across a variety of sources for new opportunities and spending a lot of time on diligence and hopefully we’ll have some exciting news to share. But there is definitely a lot to look at.

Operator: Our next question is from George Farmer with Scotiabank.

George Farmer: Hi, good morning. Thanks for taking my question. A competitor of yours has talked about combining their menin inhibitor with other targeted therapies like inhibitors and the like. Is — there hasn’t been too much conversation on the call about that this morning. Is that something that you’re thinking about as well in a greater detail?

Michael Metzger: George, thanks for the question. So in terms of combinations, maybe I’ll let Neil comment on what else is going on with targeted therapies. Obviously, we have the trials ongoing, the pillars of our strategy being ven/aza in the unfit population, and then [indiscernible] if you will, as another interesting option for patients with relapsed refractory and perhaps in earlier patients as well. So just think about it in terms of — then combos. And then on the fit side of the equation, in combination with that chemotherapy, we’ve already demonstrated the drug’s ability to be combined with chemotherapy in relapsed refractory study. We’ll have data updates on that. We’ll also have additional data, as we talked about on the ven combos this year, which so far, it looks extremely good. But I think there’s options open to us. And Niel, I don’t know if you want to comment on some of those?

Neil Gallagher: Yeah, sure. So we have investigator-initiated trials either planned or ongoing, which were — in which revumenib in combination with [indiscernible] or will be — either are or will be investigated. To Michael’s point on, conducting, for instance, a pivotal program in the frontline fit population in patients with both NPM1 and premutations is technically very challenging. It’s not really core to our strategy. Of course, we haven’t revealed overall what our strategy is, but it’s not core to our strategy. What we’ve said is that, obviously, in addition to the unfit Phase 3 that will initiate — we plan to initiate by yearend that we’re dose ranging in combination with 7+3, which will position us then to initiate a Phase 3 during 2025.

You can anticipate that that will not be in dual mutation patients because that’s a very large and complicated study. So we prefer to generate evidence in that population as opposed to potentially pursuing a registration strategy.

Operator: This concludes our question-and-answer session. I will now turn the floor over to Mr. Michael Metzger for any additional comments or closing remarks.

Michael Metzger: Thank you, operator, and thank you, all, for your questions. Appreciate you tuning in today, and we look forward to seeing you all at our planned investor events, including the Bank of America Conference in May and the Goldman Sachs Conference in June. And with that, we wish you a great day.

Operator: The meeting has now concluded. Thank you for joining. You may now disconnect.