Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q3 2024 Earnings Call Transcript

Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q3 2024 Earnings Call Transcript October 31, 2024

Syros Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-0.16, expectations were $-0.72.

Operator: Good morning, and welcome to the Syros Pharmaceuticals Third Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Note that 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 third 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 today 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 Conley Chee. Conley?

Conley Chee: Thank you, Karen. Good morning everyone and thank you for joining us. Throughout the third quarter and in recent weeks, we continue to advance our mission to develop and deliver tamibarotene as a new standard of care for the frontline treatment of newly diagnosed higher-risk MDS patients with RARA gene overexpression, which we believe represents approximately 50% of the higher-risk population. These are exciting times at Syros as we are nearing the pivotal data readout from our ongoing SELECT-MDS-1 Phase 3 trial in mid November. This is a significant milestone in our work and one we expect will be transformative for our company. As you know, there remains a tremendous unmet need for higher-risk MDS patients whose disease is often progressive and associated with a poor prognosis.

There are very few frontline therapies in late-stage development and no new treatments beyond hypomethylating agents have been approved in over a decade. The current standard of care azacitidine is an HMA that has only demonstrated a 17% complete response rate, leaving significant unmet need. Patients and physicians are seeking new treatment options that can enhance clinical outcomes without compromising safety and tolerability. We believe tamibarotene has the potential to alter the current treatment paradigm and provide patients with a well tolerated and convenient therapeutic option that can induce durable response and a better disease control. With approximately 9,000 higher-risk MDS patients diagnosed in the U.S. each year, we believe there is a significant commercial opportunity for tamibarotene.

Q&A Session

By 2029, we expect the total market opportunity for higher-risk MDS therapeutics in the U.S. will be approximately $1.6 billion and that the market opportunity for tamibarotene in the U.S. for patients with RARA overexpression will be over $800 million. As we approach our pivotal data, we are working diligently to prepare for our first NDA filing and to launch tamibarotene in the U.S. through our own commercial efforts. Once approved, our goal is to move quickly to deliver tamibarotene to the thousands of higher-risk MDS patients with RARA overexpression awaiting better treatment options. We’re really looking forward to announcing our data in the coming weeks. With that, I’ll turn it over to David to review our MDS program and upcoming milestones in greater detail.

David?

David Roth: Thank you, Conley. We are encouraged by the progress we’ve made in advancing tamibarotene, our oral selective RAR alpha agonist, as a potential new standard of care for higher-risk MDS patients with RARA overexpression, and look forward to the upcoming data from the SELECT-MDS-1 trial. As a reminder, 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, or CR, based on the analysis of the initial 190 enrolled patients, which together with supporting durability data can potentially serve as the basis for accelerated approval or full approval in the U.S. The trial will continue to enroll up to 550 patients for the key secondary endpoint of overall survival and we’re happy to report that global enrollment at over 130 sites continues to go very well.

The primary endpoint of CR is an important and clinically meaningful efficacy endpoint due to its correlation with overall survival as well as improvements in peripheral blood counts. Taken together, the clinical benefits associated with achieving a CR are compelling and reinforce our confidence in the potential of our SELECT-MDS-1 trial if successful to address significant unmet need. The SELECT-MDS-1 trial passed a prespecified futility analysis in the first quarter of 2024 based on the primary endpoint. These data, along with the favorable tolerability profile observed in previous trials, support our conviction in using the doublet strategy of tamibarotene plus azacitidine in higher-risk MDS. We’re excited for these patients who have waited years for new therapeutic advancements for their condition.

We are often asked by investors, how should we interpret the results that you’re planning to share with us in mid November or what kind of outcome are you hoping for? We believe that a successful pivotal trial result is not only one that hits its primary endpoint, but one that offers a generally well tolerated safety profile. A positive trial would excite the medical community and will be met with enthusiasm by prescribers. In particular, no new treatments in frontline higher-risk MDS beyond HMAs have been approved in over a decade. In our recent medical expert event held in June and in additional conversations we’ve had with physicians, it was emphasized that a successful trial result that achieves our primary endpoint would be clinically meaningful and likely drive strong usage.

They highlighted the challenges with existing therapies due to limited efficacy, the need for well tolerated therapies that can be given over long periods of time, and the exciting prospect for a first ever targeted agent for use in this population. Based on these considerations, we believe tamibarotene could rapidly become a standard of care. As you can imagine, we are very excited to report these pivotal data in November as they are expected to move us one step closer to bringing this potentially transformative drug to patients. 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 didn’t recognize any revenue in the third quarter of 2024 as compared to recognizing revenue of $3.8 million in the third quarter of 2023. The decrease reflects last year’s termination of Syros’ collaboration agreement with Pfizer. R&D expenses were $20.5 million in the third quarter of 2024 as compared to $28.3 million in the third quarter of 2023. The decrease was primarily due to the reduction in external R&D, consulting, contract manufacturing, and a reduction in headcounts and related expenses. Our R&D expenditures are now principally focused on the advancement of tamibarotene. G&A expenses were $5.7 million in the third quarter of 2024 as compared to $7.8 million in the third quarter 2023.

The decrease was principally due to a reduction in headcount and related expenses, consulting and facilities expenses. We reported a net loss for the third quarter of 2024 of $6.4 million, or $0.16 per share, compared to a net loss of $40.1 million, or $1.43 per share, for the same period in 2023. Cash and cash equivalents as of September 30, 2024 were $58.3 million as compared with $79 million as of June 30, 2024. We believe our current cash position will be sufficient to fund our anticipated operating expenses and capital expenditure requirements into the third quarter of 2025. With that, I will turn the call over to the operator for questions.

Operator: Thank you, sir. [Operator Instructions] First we will hear from Ted Tenthoff at Piper Sandler. Please go ahead, Ted.

Ted Tenthoff: Great. Thank you very much and I appreciate you taking the question, excited for data coming up right around the corner here. I just want to kind of reemphasize this and maybe you can walk us back through what the historical aza controls are in both on the label and then also most recent clinical experience. And how should we interpret the AML results in terms of how they could give us a sense for what you could show in higher-risk MDS? Thanks.

David Roth: Thanks Ted. This is David. I’m happy to answer your question. So with respect to the aza control data, the aza label has a complete remission rate of 17% and that has been an accepted regulatory standard to use as a benchmark for the control in a randomized trial. There have been meta analyses with hundreds of trials looked at and the CR rate is the same. Obviously there’s variation from trial to trial and in more recent trials we’ve seen some have reported up in the low 20% range. More recently, I believe one of the trials had a CR rate in the control arm of 14%. So we’re very comfortable that something in the mid to high teens is likely going to be the type of CR rate one could anticipate. Also, if you look at some of the publications, the literature, for instance, the seminal paper, the Lancet Oncology paper that reported on the pivotal outcomes of the higher-risk MDS population that is included as part of the package of data in the aza label.

The duration of response is rather short. I believe the aza arm had about a 3.2 month time for response duration compared to the control arm of three months. But that was also for CR plus PR, not just CR. Now, keep in mind, the time to onset of response for aza is typically relatively long. It could be anywhere in the four to five or four to six month range. So duration of therapy can be somewhat longer because it will take on the better part of a half year to achieve your response and that will last for several months and may continue thereafter because the patients may still have some benefit. So those are the types of expectations for the aza performance in the control. Now, if you can just please — I’m sorry, I didn’t jot the note down what your second part of your question was, and I’m happy to answer that one as well.

Ted Tenthoff: No, that’s really helpful. And then second part was just in terms of looking at the AML data, how can we sort of infer from that to MDS, if we even can?

David Roth: Yes, so look the AML experiment was really an experiment to see if we can leverage the apoptotic mechanism that we’ve seen when we’ve combined tamibarotene and aza with that of venetoclax. The idea was that we had very high CR/CRi rates and CR rates with tami and aza and venetoclax itself has a similarly high rate in the mid 60% range in newly diagnosed onset AML. So by combining all three, could we do even better? And we set up a randomized Phase 2 to see whether we can push the envelope on that. The outcome of that study demonstrated that we’re essentially maxed out on what one could achieve. So we don’t view that as having any predictive value toward the outcome of the MDS trial. The MDS trial is a totally different experiment.

It’s testing the doublet of tami and aza. Venetoclax is not a part of that experiment. And so we really don’t see a relationship between the AML outcome and the venetoclax outcome. That said, we still continue to see high responses in a tami based regimen that occur quickly. And we did have some encouraging activity even in the context of that AML data set, which included nice durations of response relative to the control arm, things of that nature. And we also saw rescue responses for patients who had been on the control arm who initially had responses to ven and aza, who then lost their response. Just adding tami into the regimen while continuing ven/aza enabled them to restore their complete remission. And at the time of our report, I believe one patient had been back out about a year at that point, another about six months having regained responses.

So we really feel that those are very important data. And the last comment I’ll say about that trial result, which is important, has to do with safety. So as you know, we don’t believe that tami and aza are challenging if the regimen is generally well tolerated, easily administered, it’s convenient. And we saw no evidence of added myelosuppression even in the backdrop of a regimen containing venetoclax. And from our perspective that’s a very important outcome because it really just points to the tolerability of a tami-based regimen and the appropriateness for its use, should our data support it in a population like higher-risk MDS where patients are generally elderly, often have other medical conditions and comorbidities that make it complicated to give them challenging regimens.

And the absence of additive myelosuppression is really important in these patients because that’s often the main problem they have at the beginning of their illness suffering from cytopenias and their complications. So all told, we’re very excited about our MDS experiment coming to fruition in just a few weeks and we’re really looking forward to sharing those outcomes with you.

Ted Tenthoff: I appreciate all that color, Dave. Thanks.

David Roth: Yes, you’re welcome.

Operator: Thank you. Next question will be from Phil Nadeau at TD Cowen. Please go ahead.

Phil Nadeau: Good morning. Thanks for taking our question and let us reiterate what Ted said really exciting times, looking forward to the data. I guess first question is on that data release, can you give us some sense of what you’ll be able to disclose presumably CR rate and safety, but also how much durability data will you have and anything else that you might be able to put in that press release? Thanks.

Conley Chee: Yes, so thanks again for that question. So again, just for anyone who’s listening that doesn’t have as much background and context, I just want to repeat, just to remind everybody, so this trial is, it’s a global randomized placebo-controlled trial of tami plus aza versus placebo plus aza. Our primary endpoint is the complete remission rate, the CR rate. So in mid November, we’re planning to report the pivotal primary endpoint outcome of the CR rate across those two arms. And this is going to be evaluated in the first 190 enrolled patients. But you know, our study continues to enroll. We’re targeting a total of 550 to support a future evaluation of the key secondary endpoint of survival, overall survival. So one thing I will say is we will not have overall survival at the time of our top line, mid November.

So you should not anticipate hearing about that because that’s still an experiment in progress. But we do expect to have other secondary endpoints that are important for you to understand our CR results. So just like you were suggesting, you will obviously have data around the duration of complete response, how quickly it occurs, the time to complete response. We may have information as well about the overall response rate, which may include other responses in addition to the CR, like PR and heme improvement. And importantly, and as I mentioned in my prior response, we’re going to have safety data to share and we think this is going to be critically important for you to appreciate. I know everyone is very focused on efficacy, but in this population safety is equally important and I think that it’s critical to look forward to hearing about that as well.

These again are elderly patients, often with other comorbidities. And taken together, I think you’re going to have a very solid understanding of how tamibarotene is working in these patients with RARA gene overexpression and higher-risk MDS. So again, looking forward to sharing it all with you.

Phil Nadeau: That’s very helpful. And then second question, in terms of the FDA filing, what do you need to do post the release of this primary endpoint data in order to file? Are there other things that also have to be completed that are getting to the filing? And secondarily, would you need to have a new pre-NDA meeting with the FDA prior to filing?

Conley Chee: Yes. So obviously we will have completed pulling in all of the data that has been thoroughly corroborated and validated. So when you hear about the information, you can assume it’s perfect. I know that we’re all working hard toward that end. And then there are the routine regulatory interactions. There’s nothing unusual that we need to do just to go through and make sure everything is buttoned down. We made great progress toward that objective. And what I can say is we’ll be working as hard as possible and as quickly as possible to get that submission in, in good order, so that the review is as efficient and straightforward as possible.

Phil Nadeau: Perfect. Thanks for taking our questions and we look forward to the data.

Operator: Thank you. Next question will be from Jason Butler at JMP Citizens. Please go ahead.

Jason Butler: Hi, thanks for taking the questions and let me add my comments about the — excited to see the data very soon. Can you maybe just talk about the commercial work that you’re doing and we’ll do over the months following the release of results if they’re positive, but you’re getting ready for commercial launch of tamibarotene and MDS? Thanks.

Conley Chee: Yes, thanks Jason for the question. It’s Conley here. Yes, our team has been working frivolously for the last year or so preparing for the launch and we have a very detailed plan going forward to ensure that we have broad access to our drug and we can get it to patients. We’ve already been conducting a lot of activity I would say prior to data. Post-data we will be accelerating a lot of that work as well. And I would say it comes in several buckets, first, sort of market awareness and ensuring that there’s education around RARA biology and the effects of overexpression. We are continuing to size up the field for us and looking at our infrastructure and how we’ll build that to support our commercial opportunity. And then lastly, the brand plan and obviously ensuring that there is manufacturing milestones are being hit so that we have drugs at launch and also our diagnostic to ensure that that’s readily available for patients as well and physicians.

Jason Butler: Great. Thanks for taking the question.

Operator: Thank you. Next question will be from Leah Cann at Brookline Capital Markets. Please go ahead.

Leah Cann: Thank you and good morning. So two questions, the first on tamibarotene. Is there any plan to — at a medical meeting or in some sort of presentation to show more of the detail of the data from the recent AML results? And my second question is something from the past 5609, I know it’s been on the backburner, but if there’s any thoughts or plans for how that could become relevant in the future? Thank you.

David Roth: Thanks, Leah. I’ll take the first one. And I — maybe you’re not aware of the — we did present the complete data outcome from the AML at the SOHO meeting, which happened shortly after our data disclosure. So I think that should be available and we’re happy to address any questions you may have about that, if you haven’t had a chance to look at that yet. And would…

Leah Cann: David, thank you. Yes, I do have those data. Apologies.

David Roth: Okay. Okay, yes, no — no problem. And then for the second one, about 5609, I’ll turn that one over to Conley.

Conley Chee: Yes, I can jump in on that one. Yes, 5609 is a tremendous asset and with high potential and we believe could be the best in class CDK7. I think with this asset, there’s this tremendous potential across multiple tumors. And to fully prosecute all of this potential, it’s better suited in the hands of a larger pharma company that has the resources to do that. And so we continue to look for business development opportunities for that asset.

Leah Cann: Thank you.

Operator: Thank you. At this time, we have no other questions registered. I will turn the call back over to Mr. Conley Chee.

Conley Chee: Okay, thank you, operator, and thank you everyone for joining and for continuing support of Syros. It’s a very exciting time here for us and potentially for the thousands of higher-risk MDS patients waiting for a better treatment option. As always, please reach out to the team if you have any further questions and have a great Halloween. Thank you.

Operator: Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.