Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q3 2023 Earnings Call Transcript

Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q3 2023 Earnings Call Transcript November 14, 2023

Operator: Good morning and welcome to Syros Pharmaceuticals Third Quarter 2023 Financial Results Conference Call. [Operator Instructions] 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 third quarter 2023 financial results. The full release is available on the Investors and Media section of the Syros’ website at www.syros.com. We will begin the call with prepared remarks by Dr. Nancy Simonian, our Chief Executive Officer; Conley Chee, our Chief Commercial Officer, Chief Business Officer and incoming 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 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. With that, I’d 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’s call marks my last as the CEO of Syros. In October, we announced my planned retirement as CEO and the appointment of Conley Chee as Syros’ next CEO. I am incredibly proud of the company we’ve built over the last 11 years. We have made tremendous progress toward our mission of translating breakthrough science into new medicines that can make a profound difference for patients on the foundation of a strong experienced leadership team and a collaborative patient-focused culture. I look forward to supporting Syros and partnering with Conley and the team as I continue my service on Syros’ Board of Directors. Following our strategic prioritization earlier this fall, Syros is a company with a singular focus.

We are devoting our resources to the advancement of tamibarotene, our oral selected and potent RAR-alpha agonist for the frontline treatment of hematologic malignancies. As Conley and David will detail this morning, we believe tamibarotene has the opportunity to become the standard of care for higher-risk MDS and unfit AML patients with RARA overexpression. Tamibarotene has a differentiated profile. It is a biologically targeted agent that has demonstrated high complete response rates, a rapid time to response and a favorable tolerability profile across multiple clinical trials. I am incredibly proud to have taken Syros from a scientific discovery in 2014 to late-stage development on the path to commercialization. As a company, we are approaching this important transformation with data from our first pivotal study in higher-risk MDS to be reported next year and initial data from the randomized portion of our Phase II study in AML that we plan to present in early December.

As we prepare for our maturation into a commercial company, it is a natural time to transition leadership to Conley, our Chief Commercial and Business Officer, who is an expert at building effective commercial organization and launching targeted oncology therapies. Conley has been a valuable member of our leadership team for over 2 years, informing all aspects of our business. Having worked with Conley during this time and during our transition over the last month, I am confident he will be an impactful and effective leader in this next stage for Syros. With that, I would like to turn the call over to Conley to provide some brief remarks. Conley?

Conley Chee: Thank you, Nancy. I’m incredibly honored to lead Syros into its next exciting phase and to build on the foundation that Nancy and the team have established. Based on behalf of all our colleagues, I would like to thank you, Nancy, for all your years of leadership. I’m here to work closely alongside my colleagues and partners in my new role as CEO to execute on our development plan for tamibarotene, prepare for our first NDA filing and launch and ultimately deliver tamibarotene to the thousands of MDS and AML patients in need of better options. Since I joined Syros 2 years ago, we’ve made great strides in building a road map to commercialization. With the recent restructuring, we’ve also now streamlined our operations to focus on our tamibarotene program.

We continue to execute on our clinical development to prepare for an NDA filing and are developing the plan for commercial infrastructure. As we approach the initial data readout in the randomized portion of SELECT-AML-1 in early December and the pivotal data from SELECT-MDS-1 next year, we are increasingly focused on building a robust commercial business that can submit tamibarotene as the standard of care for patients with RARA overexpression. We believe the market for tamibarotene is significant. Both higher-risk MDS and unfit AML are diseases that are notoriously difficult to treat. The number of frontline therapies in late-stage development have shrunk in recent months and existing frontline options are insufficient. Given that these patients are often elderly and frail, it is important to have new treatment regimens that are tolerable and manageable.

With tamibarotene, we are advancing a first-of-its-kind targeted therapy which could become standard of care for approximately 50% of higher-risk MDS and 30% of unfit AML patients who are positive for RARA overexpression. As we noted before, approximately 21,000 people are diagnosed with higher-risk MDS, nearly 25,000 people are diagnosed with unfit AML annually in the U.S. and Europe. Altogether, this creates a substantial market opportunity for tamibarotene. As we move closer to potentially delivering tamibarotene to this market, we’re beginning to engage in critical pre-commercial activities. If approved, we plan to deliver tamibarotene to patients through our own commercial efforts in the United States and are well positioned to execute on this opportunity.

I look forward to leading the team through these important efforts as we work to realize the potential for tamibarotene to provide profound benefit to patients. With that, I’ll now turn it over to David to review our programs and upcoming milestones in more detail. David?

David Roth: Thank you, Conley. We are very pleased by the continued progress in advancing tamibarotene through clinical development in both AML and higher-risk MDS. We are on track to share initial randomized data from approximately 20 patients in SELECT-AML-1 in early December. As a reminder, the randomized portion of the SELECT-AML-1 study is designed to evaluate the safety and efficacy of tamibarotene in a combination with venetoclax and azacitidine compared to ven/aza alone in approximately 80 newly diagnosed unfit AML patients with RARA overexpression. Patients are randomized 1:1 into the 2 treatment arms with the composite CR rate or the CR/CRI rate as the primary endpoint. We expect this initial data will inform our understanding of the potential clinical benefit of adding tamibarotene to ven/aza, the standard of care.

In this initial set of patients, we expect most will have completed at least 2 cycles of therapy. Given that the randomized portion of the trial started enrolment in the first quarter of this year, the focus of this initial data will be on the composite complete response rates and, of course, tolerability. We believe this first direct and randomized assessment of patients with RARA overexpression treated with the triplet regimen of tamibarotene plus ven/aza, compared to the doublet of ven/aza alone, will meaningfully inform our understanding of the potential benefits of our novel approach. We previously shared compelling data to support our tami, ven/aza triplet strategy in AML late last year. Data from the safety lead-in portion of our SELECT-AML-1 study showed a composite complete response rate of 83% with patients experiencing a rapid time to response and favorable tolerability with no additive myelosuppression compared to historical data with ven/aza alone.

In early December, we’ll provide data on an additional set of patients, all with RARA overexpression treated with the triplet as well as a direct randomized comparison to patients with RARA overexpression treated with the ven/aza doublet. Today, the standard of care for unfit AML patients is venetoclax with azacitidine which has shown a 66% composite CR rate and a median overall survival of less than 15 months. Unfortunately, approximately 1/3 of AML patients do not respond to the current standard of care with ven/aza and nearly all who initially respond will relapse. Post relapse, patients have a very poor prognosis with a median survival of only a few months. Based on data that informed the SELECT-AML-1 study, we believe tamibarotene is uniquely positioned to improve upon the standard of care in unfit AML and we look forward to sharing initial randomized data next month.

In parallel, we continue to evaluate tamibarotene for the treatment of higher-risk MDS which, like AML, represents an area of high unmet need. The existing standard of care provides limited efficacy with a 17% complete response rate and a median overall survival of just 18.6 months. No new therapies beyond hypomethylating agents or HMAs, have been approved in well over a decade. This too provides a unique opportunity for our biologically targeted approach to improve the care and treatment of patients with RARA overexpression, 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.

We continue to enroll patients in the ongoing SELECT-MDS-1 Phase III trial evaluating tamibarotene plus azacitidine. As a reminder, the primary endpoint of the trial is complete response rate in the initial 190 patients with overall survival now included as a key secondary endpoint based on continued enrolment to approximately 550 patients. We’re very excited as we approach the completion of enrolment for the primary end point. We can now project the enrolment trends more precisely and expect to complete enrolment of the initial 190 patients necessary to support approval using a CR endpoint in the first quarter of 2024 and plan to report pivotal CR data by mid-Q4 of 2024. Given the biologic and clinical similarities that establish the well-understood relationship between higher-risk MDS and AML and the supportive data we’ve seen across these patient populations to date, we believe that tamibarotene can provide significant benefit to readily identifiable genomically defined subsets of the MDS and AML patient populations and potentially establishes a new standard of care for people with RARA overexpression.

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

Jason Haas: Thank you, David. Now turning to our third quarter financial results. We recognized $3.8 million in revenue in the third quarter of 2023, consisting entirely of revenue recognized under our sickle cell disease collaboration with Pfizer that ended in October. Syros recognized $3.9 million in revenue in the third quarter of 2022, consisting of $3.7 million in revenue recognized under our collaboration with Pfizer and $200,000 recognized under our former collaboration with Incyte. R&D expenses were $28.3 million in the third quarter of 2023 as compared to $25.8 million for the third quarter of 2022. Our R&D expenditures are now principally focused on the advancement of tamibarotene. G&A expenses were $7.8 million in the third quarter of 2023 as compared to $8.1 million for the third quarter of 2022.

Restructuring costs were $2.4 million for the third quarter of 2023 and these restructuring costs were comprised of $2 million of severance, post-employment benefits, stock-based compensation and outplacement services as well as $400,000 of asset impairment charges related to the laboratory equipment that is classified as assets held for sale. We reported a net loss for the third quarter of $40.1 million or $1.43 per share compared to a net loss of $30.3 million or $3.21 per share for the same period in 2022. Cash, cash equivalents and marketable securities as of September 30, 2023, were $112 million as compared with $144 million on June 30, 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 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.

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Q&A Session

Operator: [Operator Instructions] Your first question comes from the line of Ted Tenthoff from Piper Sandler.

Ted Tenthoff: So I just want to start by asking about sort of how the landscape is changing, both in the AML and MDS and whether or not you think there’s any major changes that have occurred since you designed the SELECT studies and also just want to thank Nancy for all of her hard work and really I can’t say how much I’ve enjoyed working with you. And currently, I know you’re going to do a great job with the company. But Nancy, thanks so much and I wish all the best.

Nancy Simonian: Thank you, Ted. It’s been a real honor and pleasure also working with you and your team. I’m going to turn the question over to David to talk a little bit about how the MDS and AML landscape has changed since we designed the SELECT studies.

David Roth: Yes. So thanks for that question, Ted. So I think — let me just start by saying, some things have not changed. What hasn’t changed is the fact that there remains a very significant unmet need for patients with higher-risk MDS. It’s really a challenging disease to treat. So majority of patients are elderly or frail and the need for a well-tolerated preferably, I think, an orally available therapy that’s easy to administer and helps maintain quality of life continues to this day. And that’s really what motivates us to continue our development of tamibarotene. What has changed, however, is that there have been many drugs put into development over several years or even the time that we’ve had tami in development which have not been successful and we’ve watched this evolution of various trials that advance to Phase III that haven’t made it and of course, we reflect on that.

We have sort of a concern that patients need more and we sort of do wish others have success. But we look at our mechanism, it’s distinct. And we think that these issues separate us from the rest of the pack. So we have reasons to remain hopeful that our program will deliver ultimately and that’s why we’re so excited today.

Nancy Simonian: Talking about AML?

David Roth: So just in AML — sorry, I didn’t answer it specifically but for AML, I think the same sort of holds true. We have, I think, been an evolution of a standard of care that now includes venetoclax and azacitidine in AML. It has been developed primarily for patients who are unfit and we all do appreciate the properties of venetoclax which, while highly effective, can be associated with myelosuppression that makes it a bit more challenging for use in the patient population for which it was targeted. And so even in that context, we still feel there is opportunity to improve on that standard. Obviously, we have a program where we’re adding tamibarotene into the backdrop of venetoclax ven/aza with a hope to improve upon the performance there.

I think there still remains significant unmet need with 1/3 of patients not responding to ven/aza or patients who initially respond will ultimately relapse. So we think there’s still much that can be addressed there. There’s a range of new drugs in development that are being entered into the clinic. There’s a large focus on immuno-oncology drugs but it’s still early days. And I think it’s really a great place to be focused on our efforts for helping patients.

Nancy Simonian: Maybe to just add one thing, Ted, it’s pretty remarkable to think about the frontline treatment of these hematologic malignancies where the median overall survival in AML based on the standard of care, ven/aza, is just a little over a year. And in MDS, it’s 1.5 years. I mean there is just such a continued high unmet medical need in these spaces. And despite a lot of attempts to change that, I really do think that we are beginning to see sort of a potential inflection point but that part has not changed over the years. And as David said, that’s why we’re continuing to be so excited about the opportunity with tamibarotene.

Operator: [Operator Instructions] Your next question comes from the line of Phil Nadeau from TD Cowen.

Phil Nadeau: First, Nancy, let us add our congratulations on your tenure and coming retirement, very well deserved. A couple of questions from us. First, on SELECT-AML. I think in the prepared remarks, you said that this initial data will give us some idea of the efficacy of adding tami to the combination. Can you just talk a bit more about that, what delta between the arms would give you confidence that you are seeing additive efficacy. It might have the relatively small patient numbers. And in terms of the control arm and specifically, I think you said a 66% CR/CRI rate would be expected in the general population. What’s the most recent data on what a RARA-positive population would generate for CR/CRI for ven/aza?

David Roth: Okay. Thanks, Phil. I’ll take that one. So just again remind for everyone who’s listening, we’re undergoing a randomized trial, all the patients are positive for RARA overexpression. They all have unfit AML. And this represents the very first prospective clinical evaluation of tamibarotene being used in RARA-positive patients in combination with ven/aza compared to ven/aza. So your question about what we know about the performance of ven/aza in RARA-positive patients is unknown. And this will be our first data update that gives us initial insights into that. We are very excited that we can look forward to reporting on approximately 20 patients, reminding you it’s randomized 1:1. So you can expect a relatively equal split across that population and we’re specifically focused on those patients who have enrolled into the randomized portion.

So reminding you, this is a group who started enrolment in the first quarter and here we are in the fourth quarter giving you this update. So we’re largely focused on the response rates. We are focused on our primary endpoint which is the composite CR rate, the CR/CRI rate. And of course, we’ll report on the tolerability. As you mentioned, the ven/aza response is about 66%. The tami aza response in this population is about 61% from our prior Phase II trial, so we’re looking for a response to the triplet that is north of that. We haven’t specifically stated exactly how far north we need to be of that. That said, from our prior data last year, the safety lead-in smaller number of patients had 83% CR/CRI rate which we’re very excited about. And in that case, the tolerability supported vast majority of the randomized portion.

So that just sort of gives you a sense as to what it is we’re hopeful for as we move into the early December date of the disclosure.

Phil Nadeau: That’s very helpful. And then just one question on SELECT-MDS. It sounds like enrolment completions now Q1 ’24. I think in the past guidance had been year-end ’23. Is there any reason for that? Were there any unforeseen challenges? Or is it simply now that enrolment is near completion, you can give a more definitive and accurate guidance as to when it’s going to complete?