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

Syros Pharmaceuticals, Inc. (NASDAQ:SYRS) Q4 2023 Earnings Call Transcript March 27, 2024

Syros Pharmaceuticals, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning and welcome to Syros Pharmaceuticals Fourth Quarter and Full Year 2023 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.

Karen Hunady: Thank you. This morning, we issued a press release announcing our fourth quarter and full year 2023 financial results. The full release is available on the Investor & Media section of the 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 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 statement 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. With that, I would now like to turn the call over to Conley. Conley?

Conley Chee: Thank you, Karen. Good morning, everyone, and thank you for joining us. Late last year, we announced the initial data from our SELECT-AML-1 trial, and since then, we’ve continued to make great progress in our effort to become a commercial-stage biotech company. Following our initial AML data, we completed an equity financing of approximately $45 million, reinforcing our cash position, and providing us ample resources as we enter into 2024. This year will be a critical one in our evolution, with expected pivotal data from our SELECT-MDS-1 trial, as well as additional randomized data from our SELECT-AML-1 trial. And we’re excited to share with you that we’ve completed enrollment of the 190 patients necessary, for our primary endpoint analysis in our SELECT-MDS-1 Phase 3 trial, and we remain on track to report pivotal CR data, by the middle of Q4, this year.

If successful, these data will allow us to file our first NDA and ultimately to deliver tamibarotene to the approximately 50% of higher-risk MDS patients with RARA overexpression in need of better options. Just as a reminder, our strategy is to launch tamibarotene in the U.S. with our own specialty sales force, and we continue to make great progress against our launch plan. We look forward to sharing more details on our commercial plan as we get closer to our pivotal data readout. As we’ve discussed previously, we believe tamibarotene has the potential to bring about a transformational change for these patients, by offering a unique and targeted new standard of care, for the frontline treatment of hematologic malignancies. Our growing body of evidence indicates that tamibarotene consistently produces impressive response rates with a rapid time to response, and it’s generally well-tolerated.

We’re excited to push forward with our program, and we’ll be sure to keep you up-to-date as we progress throughout the year. With that, I now turn the call over to David to review our programs and upcoming milestones in more detail. David?

David Roth: Thank you, Conley. We’re very encouraged by the development of tamibarotene and the potential for our targeted agent to improve the frontline treatment of higher-risk MDS and AML patients with RARA overexpression. As Conley mentioned, in December of last year, we got our first look at the initial data, from the ongoing randomized portion of the SELECT-AML-1 Phase 2 study. 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 in approximately 80 patients randomized one-to-one. The initial data included 23 patients, with 19 response evaluable and demonstrated a 100% CR-CRI rate in patients treated with the triplet regimen of tamibarotene, venetoclax, and azacitidine, as compared to 70% among patients treated with venetoclax and azacitidine alone.

Importantly, 78% of the responses among patients treated with the triplet were complete responses, or CRs, compared to only 30% among patients treated with the ven/aza combination alone. The time to response was rapid across both arms, with 100% of patients in the triplet arm, responding by the end of cycle one, compared with 60% in the doublet arm. Not only was the AML data encouraging from an efficacy standpoint, but the safety profile was compelling as well. Consistent with prior clinical experience, tamibarotene in combination with approved doses of venetoclax and azacitidine was generally well tolerated, and the overall safety profile demonstrated no additive toxicities, or new safety signals. Importantly, we also saw no evidence of increased myelosuppression in the triplet arm, compared to the doublet.

We’re very encouraged by these initial results, which strongly support the potential of tamibarotene in combination, with standard of care in the frontline treatment of AML patients with RARA overexpression, and we look forward to sharing additional data later this year. We also believe the high CR rates in our AML study support the potential for tamibarotene, to deliver complete responses in our ongoing SELECT-MDS-1 trial, which has a primary endpoint based on CR. Turning to MDS, our Phase 3 SELECT-MDS-1 trial, is a randomized double-blind placebo control trial, evaluating the combination of tamibarotene and azacitidine versus placebo and azacitidine in newly diagnosed higher-risk MDS patients, with RARA overexpression. As Conley mentioned, we recently completed enrollment of the 190 patients necessary to support the complete response rate primary endpoint analysis, and we are on target to report pivotal data, by mid-fourth quarter of this year.

As a reminder, we’re continuing to enroll patients in the trial to support the key secondary endpoint of overall survival. This approach allows us to potentially secure accelerated approval, and subsequent conversion to full approval if needed. By integrating both primary and confirmatory endpoints into a single trial, we ensure we execute more efficiently, and believe this increases the probability of success, of the overall study. We believe tamibarotene has the potential to be the first novel agent approved for the treatment of higher-risk MDS in over a decade. In that time, the only approved therapies are hypomethylating agents, or HMAs, which provide limited efficacy of a 17% CR rate and a median overall survival of just 18.6 months, highlighting the critical need for new treatment options, for this patient population.

We look forward to delivering pivotal CR data, by the mid-fourth quarter of this year and evaluating the potential of tamibarotene to meaningfully improve upon the standard of care and deliver improved treatment outcomes, for patients with higher-risk MDS. I would now like to turn the call over to Jason, to review our fourth quarter and full year financial results. Jason?

Jason Haas: Thank you, David. We continue to be well capitalized to fund the ongoing development of tamibarotene. In December 2023, we completed an equity financing, which resulted in gross proceeds to Syros, of approximately $45 million before underwriting discounts, commissions, and offering expenses. The financing included new and existing investors, including Bain Capital Life Sciences, Syros co-Founder and founding investor flagship pioneering, Adage Capital Partners, Invus, Samsara BioCapital, Deep Track Capital, Blue Owl Healthcare Opportunities, DAFNA Capital Management, as well as a life sciences-focused investment fund. We are grateful to our investors for their continued support. 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 our pivotal Phase 3 data from the SELECT-MDS-1 trial and additional data from the randomized portion of the SELECT-AML-1 trial.

Now, turning to our fourth quarter and full year 2023, financial results. Revenues were $400,000 for the fourth quarter of 2023, and $9.9 million for the year ended December 31, 2023, as compared to negative $800,000 in the fourth quarter of 2022, and $14.9 million for the year ended December 31, 2022. The increase for the fourth quarter of 2023, compared to the same period of 2022 was driven primarily, by the negative cumulative cash-off adjustments recognized in the fourth quarter of 2022. The decrease for the year reflects the termination of the collaboration agreement with Pfizer-GBT in October 2023. R&D expenses were $21.5 million for the fourth quarter of 2023, and $108.2 million for the full year 2023, as compared to $27.9 million for the fourth quarter of 2022 and $111.9 million for the full year 2022.

The decrease for the fourth quarter of 2023, compared to the same period in 2022, and the decrease for the year were primarily, due to a reduction in employee-related expenses, consulting and professional fees, and other facilities-related costs. The decrease in these costs were driven, by the restructuring of our operations to prioritize key development and pre-launch activities to advance tamibarotene. G&A expenses were $5.9 million for the fourth quarter of 2023, and $28.3 million for the full year 2023, as compared to $7.3 million for the fourth quarter of 2022, and $29.3 million for the full year of 2022. The decrease for the fourth quarter of 2023, compared to the same period in 2022, and the decrease for the year were primarily due to consulting and other professional fees and facility costs.

We reported a net loss for the fourth quarter of $64.4 million or $2.18 per share, compared to a net loss of $4.8 million, or $0.17 per share for the same period in 2022. For the full year ended December 31, 2023, Syros reported a net loss of $164.6 million or $5.81 per share, compared to a net loss of $94.7 million, or $7.49 per share for the same period in 2022. Cash and cash equivalents as of December 31, 2023, were $139.5 million, as compared with cash, cash equivalents, and marketable securities of $202.3 million at the end of 2022. With that, I will turn the call over to the operator for questions.

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Q&A Session

Operator: [Operator Instructions] Our first question comes from the line of Phil Nadeau from TD Cowen. Please go ahead.

Phil Nadeau: Good morning. Congratulations on completion of enrollment and thanks for taking our questions. A couple from us. First, in terms of the data that we are going to see in Q4, can you discuss on the complete response endpoint, maybe in a bit more detail, your discussions with the regulatory agencies about how that could, support an FDA filing and how does duration of response factor into the regulatory authorities, evaluation of the CR data?

David Roth: Thanks, Phil, for that question. It’s David here. What I can say is that, the complete response is a very important clinically meaningful endpoint, because it’s associated with hematologic improvement, and heme improvement is really the clinical outcome that reverses a lot of the side effects, and complications of higher-risk MDS. And that’s why clinical complete responses are an important surrogate for clinical benefit and a well understood correlate to overall survival. So in that context, we chose the CR as the primary endpoint. We have had discussions with the FDA on more than one occasion, where the nature of our primary endpoint was part of the dialogue. And we have received confirmation that the CR, can support a regulatory decision as a primary endpoint for either a full approval, or an accelerated approval.

And of course, the durability of that remission is considered, when they make that call. So, we feel very confident that this is an important endpoint for us to focus on. And it enables us to deliver an approval in a meaningful time frame. So here we are. We have enrolled our 190 patients. We are continuing the study, as you all know, toward our key secondary endpoint, which requires 550. And we are well on our way to delivering the top line data in the middle of the fourth quarter.

Phil Nadeau: In other trials in MDS or AML, the bar for duration of response seems to be somewhere in the five to six month range. Is that a reasonable expectation in MDS and SELECT-MDS-1 as well? Or are there other data points that we should be considering?

David Roth: You are correct. The duration of response in some of the more recent approvals has been in the five and a half month range. Over time, that can increase with additional data and a longer term follow-up. I think what determines a meaningful duration is one of those assessments that requires looking at the total data package. So obviously, a fleeting response that you can only measure once and it doesn’t last would probably not be considered clinically important. Whereas, one that lasts over time, which provides the opportunity for benefit to the patient, would be. And so, I’m sure the agency will look at, not only the duration, but the time to response, the quality of the response, again how durable it is, and then all of that in the context of the safety.

So you need to really appreciate how much the safety signals could contribute, or detract from that quality of the response. And that’s where we also have a benefit in our opinion, because tamibarotene has a generally well-tolerated safety profile. It is orally administered. And over many years in many different studies looking at it in different ways, we have really seen nothing of consequence with respect to the overall safety profile. And I believe that’s, where we hold a very special advantage for the opportunity for patients.

Phil Nadeau: That is very helpful. Then one last question for Jason. Jason based on your guidance for the cash runway into Q2 of 2025, it seems like the Q4, ’23 expenses in R&D and SG&A are a reasonable run rate for future quarters, at least through 2024. Is that a fair assessment or is there any lumpiness that I’m missing?

Jason Haas: I think it is fair. We have been kind of, spending a little bit less on SG&A and R&D, over the last couple of quarters as we have really prioritized, and focused the programs on tamibarotene for MDS and AML. There’s certainly some lumpiness depending upon some payables, due to vendors along the way. But generally speaking, I think it’s fair to say when you look at the Q4 numbers, and you look at the cash that we spent, that allows us to get into the second quarter of 2025.

Phil Nadeau: That is very helpful. Thanks for taking our questions and congrats again on completion of enrollment.

Operator: [Operator Instructions] We have our next question coming from the line of Jason Butler from Citizens JMP. Please go ahead.

Jason Butler: Hi. Thanks for taking the question and congrats on – this progress. I’m wondering if you could just talk about, some of the medical affairs work and commercial prep that you are starting to do, both for MDS and AML and just what your focus will be, for the rest of 2024? Thanks.

David Roth: Sure. Why don’t I start off? Yes, let me just start off by saying some of the medical affairs work that we are doing, is really focused in the short-term on key opinion leader engagement, meeting with various healthcare organizations and making sure that the physicians, who ultimately will be prescribing the drug truly understand how it works. They need to understand the thorough grounding in the biology and the data. So, we are basically setting the stage, for an appreciation of the importance of identifying patients, who have RARA overexpression, and then being receptive to prescribing the drug, upon success of the trial.

Conley Chee: And Jason, this is Conley here. I can add to that in terms of our launch prep. As David said, the first phase of this is really around education of RARA overexpression and some awareness of tamibarotene. But also, the launch team has done a great job, in terms of laying the path, if you will to launch. Which includes investments in infrastructure and starting to look at, the types of investments we will need, most of which will be gated post-data. But I think we’re in great shape in terms of envisioning what we are going to need to make it a really great launch for tamibarotene.