Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q2 2024 Earnings Call Transcript

Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q2 2024 Earnings Call Transcript July 31, 2024

Operator: Good morning, and welcome to Syros Pharmaceuticals Second Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. This call is being webcast live on the Investors & 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 2024 financial results. The full release is available on the Investor & Media section of Syros’ website at www.syros.com. We will begin the call with prepared remarks by Conley Chee, our Chief Executive Officer; Dr. David Roth, our Chief Medical Officer; and Jason Haas, our Chief Financial Officer. We will then open the call for questions. Kristin Stephens, our Chief Development Officer, is also here on the call with us 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 Conley. Conley?

Conley Chee: 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 2024, we’ve laid a solid foundation in preparation for our upcoming data readouts for tamibarotene and AML and higher-risk MDS patients with RARA overexpression in the third and fourth quarters respectively. As we approached these readouts, we are working diligently to prepare for our first NDA filing and launch. So upon approval, we are positioned to deliver tamibarotene to the thousands of higher-risk MDS patients in need of better care. 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 tamibarotene 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 points in hematology and our team’s successful track record in bringing new medicines to patients in need. 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 a 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. 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 II AML data in September and pivotal Phase III 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?

David Roth: Thank you, Conley. We are very encouraged by the advancement of tamibarotene, our oral selective RARα agonist as a potential new standard of care for higher-risk MDS and AML patients. Across multiple trials to date, tamibarotene has demonstrated high complete response rates, rapid time to response, and a favorable tolerability profile. We believe tamibarotene 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, and this is exactly what we believe we have with tamibarotene.

First, I’ll start with our study of tamibarotene and MDS, which we are evaluating in an ongoing Phase III SELECT-MDS-1 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 tamibarotene 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. 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-1 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 three distinguished medical experts in the field to discuss SELECT-MDS-1 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.

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-MDS-1 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-AML-1 Phase II 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 one-to-one.

In December of last year, we reported data on our initial pre-specified analysis, which included 23 patients, 19 of whom were responsive, valuable. The data showed a 100% CR/CRi 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 one compared with 60% in the doublet arm. Consistent with prior observations, tamibarotene in combination with Ven/Aza 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 tamibarotene’s potential in combination with standard of care.

We are excited to report the additional SELECT-AML-1 data in September at the SOHO 2024 annual meeting. 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 second quarter financial results. Jason?

Jason Haas: Thank you, David. Now turning to our second quarter financial results. We did not recognized revenue in the second quarter of 2024 as compared to recognizing revenue of $2.8 million in the second quarter of 2023. The decrease reflects last year’s termination of Syros’ collaboration agreement with Pfizer. R&D expenses were $22 million in the second quarter of 2024 as compared to $29.6 million in the second quarter of 2023. The decrease was primarily due to the reduction in external R&D consulting, contract manufacturing, and a reduction in headcount and related expenses. Our R&D expenditures are now principally focused on the advancement of tamibarotene. G&A expenses were $5.5 million in the second quarter of 2024 as compared to $7.2 million in the second quarter 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 second quarter 2024 of $23.3 million or $0.59 per share compared to a net loss of $36.3 million or a $1.30 per share for the same period in 2023. Cash, cash equivalents and marketable securities as of June 30, 2024 were $79 million as compared with $108.3 million 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 third quarter 2025, bringing us beyond pivotal Phase III data from the SELECT-MDS-1 trial and additional data from the randomized portion of the SELECT-AML-1 trial. With that, I will turn the call over to the operator for questions.

Operator: Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question is from Phil Nadeau from TD Cowen. Please go ahead.

Q&A Session

Philip Nadeau: Congrats on the progress, and thanks for taking our questions. A few from us. First, in AML, when do you think you’d be in a position to make a go/no-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?

David Roth: Thanks, Phil. It’s David here answering 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 a pre-specified analysis of the ongoing SELECT-AML-1 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 will likely have a slightly larger number of total patients available since the enrollment continued beyond that 40-patient milestone cut point. In terms of knowing what the go/no go and the timing for 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.

Philip Nadeau: And could you give us some sense of what you would want to see to – decided to move on to a pivotal, what type of delta between the arms or anything else that’s important in your decision?

David Roth: Well, as you know, we presented data at the end of last year that showed a 100% CR/CRi 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 a 70% CR/CRi rate with 30% CR. So obviously, we were very excited about the magnitude of the complete response as well as the complete – the CR/CRi 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. 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.

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

David Roth: 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. 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.

Philip Nadeau: Perfect. And then last question for 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, have there been some cost-cutting initiatives that – minor cost-cutting initiatives that have taken expenses down?

Jason Haas: Yes. I mean at this point, Phil, as I’ve mentioned before, expenses have been coming down because we did a reprioritization kind of late last year and all of our resources are really focused on 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 I 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.

Philip Nadeau: That’s very helpful. Thanks for taking our questions.

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

Ted Tenthoff: My question is just maybe you can give us a reminder on SELECT-MDS. Really enjoyed the event that you hosted a couple of weeks ago [indiscernible]. Remind us what the power is for the Phase III trial? And what do you see as the delta needed to achieve that?

David Roth: 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 III. The primary endpoint is the CR rate and SELECT-MDS-1, and the study is powered to over 90% to show a difference in the CR rates across the two arms. We’ve modeled the powering assumptions based on our two-to-one randomization. And the numbers of patients we need to achieve that power is about approximately 190 patients. We accomplished that enrollment back in the first quarter, and we’re anticipating having the pivotal primary readout by the middle of the fourth quarter 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 aza for the control arm.

And there is 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 topline, and we anticipate you’ll have great context in being able to interpret the trial’s ultimate success as we remain hopeful.

Ted Tenthoff: Great. Thank you. Looking forward to the data at SOHO and then SELECT-MDS in the middle of the fourth quarter.

David Roth: That’s correct.

Operator: Our next question will be coming from Jason Butler from Citizens JMP.

Roy Buchanan: Hi. It’s Roy on from Jason from Citizens JMP. Thanks for taking our question. Quick one on SELECT-AML-1, the update at SOHO. What duration of follow-up you’re going to have for that data?

David Roth: 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. 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 are more recently enrolled, but we will be reporting as much as we can at the time.

Roy Buchanan: Okay. Great. And then a couple on SELECT-MDS-1. Do you have a target forum or a method for presenting the pivotal CR results in 4Q? And can you just give us an enrollment status update for the target patients for survival analysis?

David Roth: So we’ll be learning about the results from the blinded placebo-controlled randomized trial by the middle of the fourth quarter, and we’ll be sharing that as a topline 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 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 and 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 end point.

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. 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.

Roy Buchanan: Okay. Thank you.

Operator: [Operator Instructions] Our next question will be coming from Leah Cann from Brookline Capital Markets.

Leah Cann: 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 characterize the difference in how those patients present and what the appropriate endpoints are for studying them and treating them?

David Roth: Sure, Leah. Thanks for that question. So the disease you could think of is, is divided into two 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. So the higher risk patients are closer to that point in time. So in general, the risks which are defined by the IPSS-R, the International Prognostic Scoring System that was revised and published by Greenberg in 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 improvement. So some of the endpoints would be associated with hemoglobin concentration increases, just specifically. Later on, when you have high-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 and the platelets. So those patients may have bleeding, infections as well as anemia or they may be having difficulties associated with AML like symptoms.

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 in platelets, you then can claim you have a CR as long as the blasts have been reduced. So one would also expect an associated, a 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 to 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.

Leah Cann: 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 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?

David Roth: I think that’s a fair way to view it. There’s similarities and some of the reasons why a patient with low-risk disease may have a low red blood count. There’s a problematic clone of cells that are causing the problems 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.

Leah Cann: Thank you. Much appreciated.

Operator: There are no further questions at this time. I’d now like to turn the call over to Mr. Conley Chee for final closing comments.

Conley Chee: Great. Thanks, operator, and 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. 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.