Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q2 2023 Earnings Call Transcript

Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q2 2023 Earnings Call Transcript August 8, 2023

Syros Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $-1.3 EPS, expectations were $1.11.

Operator: Good morning, and welcome to Syros Pharmaceuticals’ Second Quarter 2023 Financial Results Conference Call. At this time, all participants are in listen only mode. This call is being webcast live on the Investors and Media section of Syros’ 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 Hunady, Director of Investor Relations and Corporate Communications at Syros. Please go ahead.

Karen Hunady: Thank you. This morning we issued a press release announcing our second quarter 2023 financial results. The full release is available on the Investors and Media section of Syros’ website at www.syros.com. We will begin the call with prepared remarks by Dr. Nancy Simonian, our Chief Executive Officer; Dr. David Roth, our Chief Medical Officer; and Jason Hass, our Chief Financial Officer. We will then open the call for questions. Kristin Stephens, our Chief Development Officer; Dr. Eric Olson, our Chief Scientific Officer; and Conley Chee, our Chief Commercial Officer, are also on the call and will be available for Q&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-K 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. We specifically disclaim any obligation to update or revise any forward-looking statements. I would now like to turn the call over to Nancy. Nancy?

Nancy Simonian: Thank you, Karen. Good morning everyone and thank you for joining us today. The first half of the year has been very productive for Syros and we are encouraged by ongoing momentum across our clinical trials and our precommercial activities. We remain laser-focused on clinical trial execution and are well-positioned to achieve each of our upcoming milestones with data readouts from our Phase II study, evaluating tamibarotene and newly diagnosed unfit AML expected in the fourth quarter of 2023. And from our pivotal Phase III trial of tamibarotene in higher-risk MDS expected in the third quarter of 2024, and an update on PK data and registration plans for FY 2101 in APL expected in the second half of this year. As we execute against our clinical development plans and approach data readouts, we are engaging in pre-commercial activities to ensure that we are well positioned to effectively deliver our novel treatments to patients.

We believe the potential of our biologically targeted programs in MDS, AML and APL, coupled with their commercial synergies position us for substantial long-term success with the opportunity to fulfill key unmet needs in the frontline treatment of hematologic malignancies and ultimately, deliver new standards-of-care to thousands of patients in need. I would now like to turn the call over to David, our Chief Medical Officer, to provide a more detailed update on our ongoing clinical programs. David?

David Roth: Thank you, Nancy. We are very pleased by the progress in our efforts to advance tamibarotene, our novel, oral, selective and potent RAR-alpha agonist in genomically defined subsets of patients with higher-risk MDS and AML whose disease is characterized by the overexpression of the RARA gene. Enrollment in both the SELECT-AML-1 Phase II trial and the SELECT-MDS-1 Phase III trials are ongoing, and we are on track to achieve the enrollment numbers necessary to support planned data readouts with initial data from the SELECT-AML-1 in the fourth quarter of 2023 and pivotal CR data from the SELECT-MDS-1 in the third quarter of 2024. As we continue to screen patients for both trials, we’ve observed that approximately 50% of patients with higher-risk MDS and 30% of AML patients are positive for RARA overexpression, consistent with our expectations.

As such, we continue to believe that tamibarotene has the potential to address a significant market opportunity by addressing sizable segments of the high-risk MDS and unfit AML patient populations who are underserved by existing options. We have compelling data to support our belief that the addition of tamibarotene could improve upon the outcomes of the standard-of-care. Over the past several years, we’ve evaluated tamibarotene in multiple clinical trials, which have consistently demonstrated activity with potential for meaningful benefit. Most recently, as we announced late last year in the safety lead-in portion of our Phase II AML study evaluating tamibarotene in combination with azacitidine and venetoclax, our triplet regimen demonstrated high composite complete response rates with rapid time to response and favorable tolerability with no additive myelosuppression.

Given the similarities between MDS and AML and the supportive data we’ve seen across these patient populations to date, these results give us confidence that tamibarotene’s differentiated profile could benefit biologically targeted MDS and AML patient populations that are readily identifiable and potentially establish a new standard-of-care for people with RARA gene overexpression. It’s also worth emphasizing the sizable unmet need in high-risk MDS and AML that may be addressed by tamibarotene. Starting with higher-risk MDS, there have been no new therapies beyond hypomethylating agents, or HMAs, approved in well over a decade. The existing standard-of-care provides limited efficacy with a 17% CR rate and a median overall survival of just 18.6 months.

This may be attributed to the use of a non-targeted agent, like an HMA in an unselected higher-risk MDS patient population with clinical and genetic heterogeneity. At the same time, this provides a unique opportunity for differentiation with tamibarotene our biologically targeted approach designed specifically to address the approximate 50% of patients who present with RARA gene overexpression and who can be readily identified using a simple blood test assay. Tamibarotene also benefits from a generally well-tolerated safety profile, which is particularly well suited to this generally elderly and frail population. As a reminder, in our SELECT-MDS-1 Phase III trial, we are evaluating the combination of tamibarotene plus azacitidine in a double-blind, placebo-controlled study in newly diagnosed high-risk MDS patients with RARA overexpression.

The primary endpoint of the study is complete response rate in the initial 190 patients with overall survival now included as a key secondary endpoint. As we described last quarter, recent FDA feedback continues to support our use of CR rate as an appropriate primary efficacy endpoint for either full or accelerated approval. That said, if tamibarotene receives accelerated approval, the addition of overall survival as a key secondary endpoint in the same study could allow select MDS-1 to also confirm clinical benefit, to support full approval in the future, potentially avoiding the need for a separate confirmatory study. Under the current protocol, to select MDS-1 trial will enroll a total of 550 newly diagnosed higher-risk MDS patients, including the initial 190 patients supporting the primary endpoint.

We’re on track to complete enrollment of the initial patients necessary to support approval using a CR endpoint in the fourth quarter of this year and plan to report pivotal CR data in the third quarter of 2024. Now, moving on to AML, where we are evaluating tamibarotene in the SELECT-AML-1 Phase II trial in newly diagnosed unfit AML patients with RARA overexpression. Despite recent advancements in AML, roughly one-third of newly diagnosed unfit AML patients do not respond to the current standard-of-care and virtually all patients eventually relapse. And as for MDS, we continue to believe there is an important opportunity for tamibarotene to address existing unmet need in a sizable AML patient segment, approximately 30% who are identifiable by RARA overexpression.

The randomized portion of the ongoing SELECT-AML-1 Phase II study is designed to evaluate the safety and efficacy of tamibarotene in combination with ven/aza, compared to ven/aza alone in approximately 80 newly diagnosed unfit AML patients. Patients were randomized 1:1 into the two treatment arms with composite CR rate or the CR/CRI rate as the primary endpoint. In the fourth quarter of this year, we expect to report initial data from this trial. This will be the first direct comparison of patients with RARA overexpression treated with the triplet regimen of tamibarotene plus ven/aza, compared to ven/aza alone and we believe may help inform in our understanding of the performance of the triplet versus the doublet in AML in advance of sharing additional data in 2024.

Now, turning to 2101, which is being evaluated in an ongoing dose confirmation study. We remain encouraged by the potential of our novel form of ATO to alleviate the significant burden of the current standard-of-care for APL that includes the use of intravenous ATO. While IV ATO is highly effective offering a cure rate of over 80%, it is highly burdensome for patients, requiring up to 140 treatment infusions over nearly a year, each of which lasts two to four hours. By providing an oral form of ATO we believe we can offer an oral regimen that is effective while also increasing access and reducing health care costs and utilization. We continue to gather PK data from the dose confirmation study and we look forward to providing an update in the second half of this year, which will include the development path and timing for further evaluation of 2101 in a registration-enabling study in APL.

Finally, at the ASCO Annual Meeting in June, we presented encouraging new data from the Phase Ib clinical trial of 5609, which supports further development of 5609 in pancreatic and HR-positive breast cancer and demonstrates the significant potential of selective CDK7 inhibition in a wide range of tumor types and combinations. These data received a warm reception from clinicians and key opinion leaders who are encouraged by the promising activity observed in heavily pretreated populations that are unlikely to respond to the standard-of-care, as well as the predictable, well-managed tolerability profile. We believe these data strongly support our ongoing exploration of out-licensing opportunities to support further development of this program and look forward to providing an update at the appropriate time in the future.

I would now like to turn the call over to Jason, our Chief Financial Officer, to review our second quarter financial results. Jason?

Jason Haas: Thank you, David. Now, turning to our second quarter financial results. We recognized $2.8 million in revenue in the second quarter of 2023, consisting entirely of revenue recognized under our collaboration with Pfizer. Syros recognized $6.3 million of revenue in the second quarter of 2022, consisting of $5.7 million in revenue recognized under our Pfizer collaboration and $0.6 million recognized under our collaboration with Incyte. . R&D expenses were $29.6 million in the second quarter of 2023 as compared to $33.1 million for the second quarter of 2022. Our R&D expenditures are now principally focused on the advancement of the company’s late-stage clinical programs. G&A expenses were $7.2 million in the second quarter as compared to $6.9 million for the second quarter of 2022.

We reported a net loss for the second quarter of $36.3 million or $1.30 per share compared to a net loss of $34.5 million or $5.40 per share for the same period in 2022. Cash, cash equivalents, and marketable securities as of June 30th, 2023, were $144 million as compared to $166 million on March 31st, 2023. We continue to believe our current cash position will be sufficient to fund our anticipated operating expenses and capital expenditure requirements into 2025, which is beyond Phase III data from the SELECT-MDS-1 trial and data from the randomized portion of the SELECT-AML-1 trial. With that, I will turn the call over to the operator for questions.

Q&A Session

Operator: Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question will come from Ted Tenthoff at Piper Sandler. Please go ahead.

Ted Tenthoff: Great. Thank you very much. Good morning and thanks for taking my question. Excited for all the update on the SELECT program. My question had to do a little bit more on the partnering side, just with the discovery efforts and the past partnerships and 5609. Where are you guys currently in terms of evaluating or considering new partnerships.

Nancy Simonian: Ted, thanks for the question. I’ll have Conley answer that question, Conley?

Conley Chee: Hi, thanks for the question, Ted. Yes, as you know, we are — as Jason just mentioned, we’re really focusing our resources on our late-stage programs in regards to tamibarotene and 2101. So, we’ve been in discussions and continue to be in discussions around our 5609 program in all of our discovery efforts, and as soon as we have any news for you we’ll certainly update you on that.

Ted Tenthoff: Great. Excited for SELECT data later this year and next year.

Nancy Simonian: Yes.

Conley Chee: As are we.

Operator: Your next question will come from Phil Nadeau at TD Cowen. Please go ahead.

Phil Nadeau: Good morning and congrats on progress and thanks for taking our questions. A few from us. So, in terms of tami and AML, when do you think you’d be in a position to make a go/no-go decision on further development there? Is the data that we’re going to get in Q4 sufficient or the extended results in 2024 more likely to inform that decision?

Nancy Simonian: Yes. Thanks. I’m going to have David answer that question.

David Roth: Thanks Phil. So, we are planning to present our initial data coming from the randomized portion of the trial in the fourth quarter. And we’re looking to that data to have greater insights into the upcoming data readouts that we have targeted for 2024, so while we haven’t specified like what would be a go/no-go and when that would occur, I think that you should view the anticipated data presentation in the fourth quarter as initial dig out.

Phil Nadeau: And what’s your updated thoughts on how many patients we’ll see in Q4?

David Roth: We haven’t specified the numbers of patients. Obviously, we look forward to presenting enough information so that one can meaningfully understand what’s going on and help us to provide insights into how we’re moving forward. Now, keep in mind, this will be the very first data readout of the triplet of tami, ven/aza versus ven/aza in patients with RARE overexpression. So, we’re really excited to provide our initial insights into how the triplet will be performing in our targeted population and I think that you should look forward to hearing what we have to say at that point.

Phil Nadeau: Great. And then in terms of SELECT-MDS-1, we recently saw magrolimab fail at its futility analysis. Can you let us know whether there are any futility analysis planned for SELECT-MDS-1 after the primary end point, but before the overall survival data are produced? And maybe more generally, was there anything that you learned from magrolimab’s failure?

Nancy Simonian: David?

David Roth: Sure. Those are all good questions. Obviously, disappointing for the patients who were looking to that program for a future treatment option. And we regret that for them. In terms of our program, we’re conducting a randomized placebo-controlled trial. We do have an interim futility analysis. And then our first efficacy analysis is the primary analysis for the CR rate based on those initial 190 patients, so we haven’t really specified additional analyses subsequent to that. As you know, we amended the trial to add additional patients up to 550 for a future confirmatory secondary endpoint of survival, but we haven’t really specified additional analysis beyond our primary analysis for the initial approval. In terms of why they had the result they had.

And unfortunately, we can’t really speak to it because we don’t have insight into their data or the performance of their study. And so for that reason, we really can’t shed light on whether there’s any through to our own program. We, however, certainly don’t feel there is because we have a unique mechanism of action where a small molecule, not an antibody, and we have a targeted population that we can readily identify. So, with our novel biology and our generally well-tolerated safety profile, we think we have several features that differentiate us from what magrolimab was trying to do and how they were working, such that, that insulates us from any read through.

Phil Nadeau: And the fertility analysis you mentioned, is that before the primary endpoint analysis?

David Roth: Yes, there likely will be a futility before the primary efficacy analysis, and again, that’s largely a futility analysis based on the safety and the risk/benefit ratio. And it’s all blinded. We won’t really have insight into the details of the data at that point.

Phil Nadeau: Great. And then last question from us. On 2101, in terms of the updates in the second half of the year, has an FDA meeting been scheduled? And what new PK data will we be able to present once you do update us on the path forward?

David Roth: So, for that program, we’re currently working on the dose confirmation trial doing analysis of the PK data assets being generated. We’ve said that we would provide an update in the second half of the year, where we will obviously share more information coming out of that study with more details around what our development plan and timelines will be for next steps. And at that point, we’ll be able to provide you with more specific information.

Phil Nadeau: Great. Thanks for taking all our questions.

Nancy Simonian: Thank you, Phil.

Operator: There are no further questions on the phone line. So, I will turn the conference back to Nancy Simonian for any closing remarks.

Nancy Simonian: Thank you, operator and thank you everyone for joining us today and for your continued support of Syros. Please reach out with any further questions. Have a great day.

Operator: Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank everyone for participating and ask you to please disconnect your lines.