Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q4 2022 Earnings Call Transcript

Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q4 2022 Earnings Call Transcript March 2, 2023

Operator: Good morning, and welcome to Syros Pharmaceuticals Fourth Quarter and Full Year 2022 Financial Results Conference Call. At this time, all participants are in a 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.

Karen Hunady: Thank you. This morning we issued a press release announcing our fourth quarter and full year 2022 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; Dr. David Roth, our Chief Medical Officer; and Jason Haas, our Chief Financial Officer. We will then open the call up for questions. Kristen 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 may 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 annual report on Form 10-K that we filed this morning 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 Simonian: Thank you, Karen. Good morning, everyone and thank you for joining us today. 2022 marked a meaningful year for Syros in which we made important advances towards our pursuit to deliver new standards of care for the frontline treatment of hematologic malignancies. Today, we are focused on our late-stage programs in MDS, AML and APL, three diseases in which there is significant need for more convenient and well-tolerated treatment options that improve clinical outcomes, while still maintaining patients’ quality of life. We believe that MDS, AML and APL markets are attractive with business synergies that we plan to address through our own commercial efforts in the US. Over the past year we reached important milestones in our heme programs.

In December, we announced positive data from the safety lead-in portion of the SELECT-AML-1 study enabling us to move into the randomized portion of our Phase II study this quarter. In August, we announced promising preliminary data from our dose confirmation study of SY-2101, which if additional data are supportive, we believe could enable an efficient go-to-market strategy. We continued progressing the ongoing SELECT-MDS-1 pivotal trial. And in recent months, we’ve seen momentum in site activations and enrollment across our global sites. And in January, we were delighted to receive FDA Fast Track Designation for tamibarotene for the treatment of higher-risk MDS, underscoring the critical need for new treatment options for this patient population.

I am also pleased to announce that in December, we extended our collaboration with Global Blood Therapeutics for another year with the term now scheduled to end in December 2023. In addition, we strengthened our balance sheet and extended our cash runway into the second quarter of 2025 with the successful close of our September 2022 financing in which we secured approximately $190 million in capital. Importantly, we believe these proceeds are sufficient to fund our cash requirements past Phase III data from the SELECT-MDS-1 trial and data from the randomized portion of the SELECT-AML-1 trial, while also allowing us to begin investing in pre-commercial activities important in bringing our therapies to market. Together, these accomplishments provide a tremendous foundation, as we look ahead and prepare for multiple upcoming catalysts.

Specifically, we expect to complete enrollment in the SELECT-MDS-1 Phase III trial, in the fourth quarter of 2023 and to announce pivotal data in the third quarter of 2024. We share initial data from the randomized portion of the SELECT-AML-1 trial, in the fourth quarter of 2023, followed by additional data in 2024. And share an update on the dose confirmation study of 2101 and APL, and next steps on a registration pathway in the second half of 2023. I would now like to turn the call over to David, to provide a more detailed update on our ongoing clinical programs. David?

David Roth: Thank you, Nancy. Today, I’ll provide an update on our clinical stage pipeline and walk through the upcoming readouts we anticipate, over the next 18 months. First, I’ll begin with tamibarotene in MDS. As Nancy mentioned, we are pleased by the FDA’s recent decision to grant Fast Track Designation to tamibarotene, for the treatment of higher-risk MDS, allowing us the opportunity to potentially expedite the delivery of tamibarotene, as a new standard of care for people living with this progressive disease. As we’ve discussed before today, newly diagnosed higher-risk MDS patients, have limited available treatment options. The existing standard of care hypomethylating agents, offer only a 17% complete response rate and a median survival of 18.6 months.

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And no new therapies beyond HMAs have been approved, since 2006. The FDA grants Fast Track Designation to help speed the approval of new drugs for which nonclinical or clinical data, demonstrate the potential to address a significant unmet medical need. Therapeutic candidates that received Fast Track Designation, may be eligible for more frequent interactions with the agency, as well as priority review and accelerated approval if supported by clinical data. In recent discussions, the FDA has reiterated its support for our Phase III design including using complete response rate, as an appropriate endpoint for regulatory decision-making along with supporting data on durability of remission. We continue to see steady progress in our pivotal SELECT-MDS-1 trial, the only actively recruiting registration-enabling trial, in frontline higher-risk MDS that we are aware of.

We now have over 90 sites activated in 13 countries, and we are encouraged by physician enthusiasm at the open clinical sites. We continue to expect to complete enrollment in the fourth quarter of this year, and look forward to sharing pivotal CR data in the third quarter of 2024. Now turning to our study of tamibarotene, in unfit AML or the approximately half of AML patients, who are not eligible for intensive chemotherapy, due to their age or an underlying medical condition. Today, the standard of care for unfit AML patients is Venetoclax with Azacitidine or ven/aza, which has shown a 37% CR rate and a median overall survival of 14.7 months. Unfortunately, approximately one-third of patients do not respond to frontline ven/aza, and nearly all relapse.

And when these patients relapse, they have a very poor prognosis with median overall survival rates of only 2.4 months. At ASH in December, we announced positive data from the safety lead-in portion of our SELECT-AML-1 study. The triplet combination of tamibarotene and ven/aza in newly diagnosed unfit AML patients with RARA overexpression, demonstrated an 83% CR/CRi rate with a rapid onset of action. The data also showed that tamibarotene in combination with approved doses of ven and aza, showed no evidence of increased toxicity, relative to historical data with the doublet combination of ven/aza in this population. This includes rates of myelosuppression. So based on these data, we moved into the randomized portion of the SELECT-AML-1 study, which we initiated in the first quarter of this year.

The randomized portion of the trial is designed to evaluate the safety and efficacy of tamibarotene, in combination with ven/aza compared to ven/aza, in approximately 80 newly diagnosed unfit AML patients with RARA overexpression who are randomized 1:1 with composite CR rate as the primary end point. We look forward to announcing initial data from the randomized portion of the trial in the fourth quarter of 2023 and additional data in 2024. Lastly, I will turn to 2101, our novel oral form of arsenic trioxide or ATO, which is currently being evaluated in an ongoing dose confirmation study for the frontline treatment of APL. Approximately 2,000 people are diagnosed with APL in the US and EU annually. And the current standard of care is IV ATO combined with oral ATRA.

While effective IV ATO is very burdensome for the patient, involving up to 140 treatment infusions each over two to four hours for nearly a year. We believe an oral ATO therapy could significantly reduce this treatment burden while also increasing access and reducing healthcare costs and utilization. We believe 2101 could provide exactly this offering patients an all oral regimen that is both effective and allows for a better quality of life. We’re making good progress in the dose confirmation study. As Nancy mentioned in August, we announced initial data from the trial demonstrating high oral bioavailability of approximately 80% with exposures comparable to IV ATO based on both Cmax and AUC. Based on these emerging data, we believe there may be an opportunity to explore a more efficient registration pathway to potential approval.

We plan to share an update on the dose confirmation study and next steps on our registration pathway in the second half of this year. In all programs, we continue to make excellent progress across our hematology pipeline. We’re advancing three programs through late-stage development, each with the potential to become standard of care and to dramatically improve the lives of patients. We have multiple catalysts upcoming this year and next, and look forward to providing additional updates soon. I would now like to turn the call over to Jason to review our fourth quarter and full year 2022 financial results. Jason?

Jason Haas: Thank you, David. Now I’ll turn to our fourth quarter and full year 2022 financial results. As Nancy mentioned, we extended our collaboration agreement with Global Blood Therapeutics, this past December for another year. As a result, we extended the amortization period of the upfront payment that GBT made to us at the start of the agreement in 2019. This required us to make a one-time cumulative catch-up adjustment to true up the revenues recognized in the fourth quarter. Therefore, we recognized negative $800,000 of revenue from the GBT collaboration in the fourth quarter. For 2023, we will continue to recognize the revenue from GBT as we have in the past. For the full year, we recognized $14.9 million in revenue, consisting of $13.6 million under our collaboration with GBT and $1.3 million under our collaboration with Incyte.

For the fourth quarter of 2021 and full year 2021, we recognized a total of $7.8 million and $23.5 million of revenue respectively, from our collaboration with GBT and Incyte. R&D expenses were $27.9 million in the fourth quarter and $111.9 million for the full year as compared to $26.8 million for the fourth quarter of 2021 and $99.9 million for the full year of 2021. Both the increases for the fourth quarter of 2022 and full year 2022 were primarily due to increased costs associated with the continued advancement of our clinical programs and employee-related expenses. Based on our current operating plans, we expect that our future R&D expenses, relating to our preclinical and drug discovery stage programs, will be reimbursed by our collaboration partners.

G&A expenses were $7.3 million in the fourth quarter of 2022 and $29.3 million for the full year 2022 as compared to $6.4 million for the fourth quarter of 2021 and $23 million for the full year 2021. Transaction-related expenses of $9.5 million for this past year, primarily consisted of incurred cost allocated to the warrants issued in connection with the PIPE financing that were accounted for as liabilities and severance paid to former TYME employees following our acquisition of TYME, which closed in September 2022. We reported a net loss for the fourth quarter of $4.8 million or $0.17 per share, compared to a net loss of $23.8 million or $3.78 per share for the same period in 2021. For the full year ended December 31 2022, Syros reported a net loss of $94.7 million or $7.49 per share, compared to a net loss of $86.6 million or $13.84 per share for the same period in 2021.

Cash, cash equivalents and marketable securities as of December 31st 2022 were $202.3 million as compared with $143.4 million at the end of 2021. We believe our current cash position will be sufficient to fund our anticipated operating expenses and capital expenditure requirements into the second quarter of 2025 beyond, Phase 3 data from the SELECT-MDS-1 trial and initial 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: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Your first question comes from Philip Nadeau from TV Bandra . Please go ahead.

Philip Nadeau: Hi. Good morning. Thanks for taking my questions. A couple from us, first, on the data from SELECT-AML-1 in Q4, can you talk a little bit more about the quality of data that you’ll be able to release at that time. Approximately how many patients with, how much follow-up in what endpoints do you think you’ll be willing to disclose?

Nancy Simonian: Phil, I’m going to ask David to take that.

David Roth: Sure. Thank you, Phil. So as we’ve just reported we’ve initiated enrollment into the randomized portion of the trial and we anticipate reporting data coming out of the randomized portion of the study. We haven’t yet specified the total number of patients that would be available. Keep in mind it will be balanced randomization one-to-one into each of the two arms. So we look forward to getting good insights into the performance of the triplet combination versus the doublet in patients who have RARA over expression, it’s going to be very important to provide us with context as to how to interpret the data. And as usual we’ll report on the response rates and available other information durability and any available safety to help continue to understand how the triplet is working. So I think we should all look forward to that data presentation is an important update.

Philip Nadeau: That’s helpful. And then, second on 2101 could you maybe share with us some possible designs of a more efficient registration path to approval what type of efficiencies do you think you could realize after you have discussions with the FDA?

David Roth: So just — so the answer is, no. We haven’t yet disclosed specific alternative design options. So it’s premature for me to comment on that. But I mean, I do think it’s fair for me to give you some insights into that. As we initially designed that study which we vetted with the global regulatory agencies we had really important and encouraging data coming out of Orsenix which demonstrated the exposures relative to historical data with IV arsenic. And we are really the first to ever test directly in patients the oral versus IV. And so to provide properly collected data that could support a PK evaluation to really hone in on the exposures and the appropriate dosing. That’s what this has been all about. It’s a dose confirmation study.

And as we previously shared later last year earlier last year that is that we have data emerging that really supports encouraging outcomes both based on Cmax and AUC and high bioavailability that really supports new ways of thinking about how to streamline the development strategy. And I guess, streamlining could mean fewer patients or shorter times to delivering the data. And that’s what we’re all about is bringing this forward as quickly as possible. So without specifically giving you great details I think, you could look forward to that update in the second half of the year. And you’ll have more insights into how we’re thinking about things.

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

Karen Hunady: Thanks, Phil.

Operator: Thank you. Your next question comes from Mark Breidenbach from Oppenheimer. Please go ahead.

Mark Breidenbach: Hey. Good morning. Thanks for taking our questions. Just a couple of quick ones for me as well. First of all, can you just remind us if there any futility analyses built into the SELECT-MDS-1 protocol that we could see between now and top-line data in the third quarter of next year? And then the second question is just housekeeping for Jason. I’m wondering, if share count has stabilized now. I think it’s around 20.3 million in the 10-K. Is that number expected to fluctuate much or is it kind of settled around there following the merger with TYME? Thanks for taking the questions.

Nancy Simonian: Hey, Mark, I’ll take the first one. So on the futility, we have not guided to any expectations for futility analysis. So I think really the focus should be on the pivotal CR data in the third quarter of 2024.

Mark Breidenbach: Okay.

Jason Haas: And Mark, it’s Jason. On the share count we have 20.3 million basic shares outstanding and that ought to remains relatively stable. We also have 7.5 million prefunded warrants. So the way I would think about our share count is a total of 27.8 million shares outstanding. So to the extent some of the investors who took prefunded warrants convert those warrants into common shares we’ll just have a different distribution between the common and the prefunded, but the aggregate number of shares ought to remain relatively constant at 27.8 million in round numbers.

Mark Breidenbach: Understood. Okay. That’s super helpful. Thank you.

Karen Hunady: Thanks, Mark.

Operator: Thank you. Your next question comes from Jason Butler from JMP Securities. Please go ahead.

Jason Butler: Hi. Thanks for taking questions. Two for me also. Just on SELECT-AML, can you just remind us if you’re stratifying patients by monocytic expression score? And then for 2101 , have you already had interactions with FDA that support — the potential for an expedited path, or if not can you talk about what plans you would have to interact with FDA before we get the update later this year? Thanks.

Nancy Simonian: So I’ll have David take the first. And just to clarify the second question was related to 2101.

Jason Butler: Yes.

Nancy Simonian: David you had any? Okay. Yes.

David Roth: So with respect to the AML, you’re asking about what the AML trial is stratified by…

Nancy Simonian: Whether selecting based on — any selection based on the monocytic phenotype.

David Roth: Yes. No. So we — we’re not. The criteria are consistent with the design of the original Phase II at the newly diagnosed unfit provided they have RARA overexpression using the same test we’ve used all along. Obviously, we are going to be collecting that data and looking at that and that’s going to be very important for us to understand that correlation. We did report from the ASH presentation you may recall we had six patients who were evaluable for clinical activity. And we saw an 83% CR/CRi rate, which was really encouraging. And of five of the patients at that time who we had the monocytic expression score evaluated four were positive. So that’s again 80% positivity rate which was spot on for the prior analysis from the Phase II.

So we have reason to predict consistency of data across the trials and look forward to giving you an update later this year. And then with respect to the 2101 trial, you’re asking if we’ve had regulatory interactions that — I think it’s a little premature for us to discuss that we haven’t disclosed specifically. We do in the course of our ordinary development communicate with the regulators globally regarding our plans to make sure we’re on the right path. But I think that will be part of what we look forward to discussing in the second half of the year we give you more clarity on our next steps.

Jason Butler: Okay. Thank you.

Operator: Thank you. There are no further questions at this time. You may proceed.

Nancy Simonian: Thank you, operator. Thank you everyone for joining us today. We look forward to an exciting and productive year ahead and thank you for your continued support of Syros. Please reach out to us with any further questions. Have a great day.