Syros Pharmaceuticals, Inc.(SYRS) Q1 2020 Earnings Call Transcript

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Syros Pharmaceuticals, Inc. (SYRS 3.01%)
Q1 2020 Earnings Call
May 07, 2020, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning and welcome to Syros Pharmaceuticals' first-quarter 2020 financial fesults conference call. [Operator instructions] This call is being webcast live on the Investor and Media section of Syros' website at www.syros.com. Please be advised that today's call is being recorded. [Operator instructions] At this time, I would like to turn the call over to Naomi Aoki, vice president of corporate communications and investor relations at Syros.

Naomi Aoki -- Vice President of Corporate Communications and Investor Relations

Thank you. This morning, we issued a press release with our first-quarter 2020 financial results, along with anticipated future milestones and recent accomplishments. This release is available on the Investors and Media section of Syros' website at www.syros.com. We will begin the call with prepared remarks by Dr.

Nancy Simonian, our chief executive officer; and Joe Ferra, our chief financial officer. We will then open the call for questions. Dr. David Roth, our chief medical officer; Dr.

Eric Olson, our chief scientific officer; and Dr. Jeremy Springhorn, our chief business officer, are also on the call and will be available for Q&A. Before we begin, I would like to remind everyone that 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 annual report on Form 10-K, our quarterly report on Form 10-Q that we filed this morning, and any other filings that we may make with the SEC in the future.

In particular, the extent of which the COVID-19 outbreak continues to impact our operations and those of the third parties on which we rely will depend on future developments, which are highly uncertain and cannot be predicted with confidence. Any forward-looking statements made on this call 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 -- Chief Executive Officer

Thanks, Naomi. Good morning, everyone, and thank you for joining us. I want to begin today by thanking my colleagues at Syros. Despite tremendous disruption to their personal and professional lives, our team has continued to come together to support each other, our patients, and our broader communities during the COVID-19 pandemic.

The last couple of months have been very challenging but also incredibly inspiring. I have been reminded daily of the creativity, ingenuity, and collaboration of the Syros team and our foundational commitment to delivering novel gene control medicines to underserved patients with cancer and monogenic diseases. It is thanks to the hard work and dedication of my colleagues that we were able to rapidly implement measures to protect the health and well-being of our employees and those involved in our clinical trials, and progress both our SY-1425 and SY-5609 studies with minimal impact to date. The novel coronavirus has reminded all of us the critical importance of medical innovation and highlighted the tremendous ability of the global biopharmaceutical industry to all act collaboratively and with urgency to deliver new options to people with really serious diseases.

While our near-term focus at Syros is on ensuring the safety, health and well-being of our employees and those involved in our clinical trials and on enabling the continuity of our earlier-stage research, we are also taking this as an opportunity to reflect on the importance of our mission and foundational values. As efforts around the globe have made abundantly clear, by acting as one unified team and harnessing the power of multiple disciplines in the service of a greater good, it is possible to embrace big, even seemingly unsurmountable challenges and deliver new medicines that provide profound benefit to patients. Let me now turn to the steps we've taken at Syros to be able to manage COVID-19's impact on our business and operations. We are fortunate that as of today, we have seen no significant impact to enrollment in our ongoing trials of 1425 or 5609, and we remain on track to report data from both studies this year.

As a reminder, we expect to share potential proof-of-concept data for 1425 in RARA-positive relapsed or refractory AML; more mature data for 1425 in newly diagnosed AML patients who are not suitable candidates for standard chemotherapy; and initial dose escalation data for 5609, all in the fourth quarter. I am also particularly pleased to share that we recently completed enrollment in our Phase II trial cohort evaluating 1425 in combination with azacitidine in RARA-positive relapsed or refractory AML. This accomplishment is a testament to the flexibility and dedication of the Syros team and clinical trial sites and also reflective of the significant burden of disease facing the patients who are enrolled in our studies. Cancer is a life-threatening, intractable foe and patients in our trials, including AML and the advanced tumor patients, face significant mortality and morbidity.

They cannot wait until the pandemic is over to act with potential treatments and so we are doing everything in our power to prevent potential disruptions. To that end, we have made some adjustments to protect the health and well-being of the patients and clinical site personnel who are involved in our clinical trials as well as our integrity of the clinical trial. For both our 1425 and 5609 studies, we are now engaged in remote study monitoring, increasing telehealth and local laboratory assessments and are also working with our clinical trial sites to support at-home nurse visits whenever possible. This transition has been relatively straightforward, that given both 1425 and 5609 are oral agents that can be taken at home.

Finally, while we believe we have sufficient supply of clinical trial materials to support forecasted demand for both our ongoing clinical studies, we are implementing contingency plans to ensure that continues to be the case should the pandemic persist into 2021. Together, we are hopeful that these steps will allow us to continue advancing our ongoing clinical trials with minimal disruption as we navigate the uncertainties ahead. So we are well positioned now, we are aware that we are operating in an ever-evolving landscape. We are continuing to stay in close contact with our clinical investigators to understand the implications of the pandemic for our ongoing clinical trials, and we will update our study procedures as necessary to ensure we are always operating in the best interest of those involved.

Going forward, we will continue to operate in accordance with guidance from the FDA and EU regulatory authorities related to the conduct of clinical trials during the pandemic to ensure we maintain the integrity of our trials. We are also continuing to advance critical earlier stage research. While the majority of our employees are working remotely, we have maintained our lab-based operations on a limited basis with a focus on translational medicine activities to really support the ongoing clinical development and drug discovery efforts to identify future development candidates for cancer and monogenic diseases. We have adopted measures consistent with guidance from local and federal health authorities to maintain the safety of our lab-based employees.

We are also keeping additional drug discovery activities going through increased outsourcing. It is our hope that these steps will enable us to deliver on the mid- and longer-term benefits to our patients that can be borne out of our discovery and translational efforts. Looking beyond COVID-19, 2020 remains an important year for Syros, marked by continued clinical execution and anticipation of data readouts for both 1425 and 5609 in the fourth quarter. In the near term, we are looking forward to presenting 2 posters at the Virtual ASCO Meeting later this month.

One poster describes the design of our ongoing Phase I trial of 5609 and the other detailed new data on the antitumor activity of 5609 in preclinical models of colorectal cancer, supporting our decision to include colorectal patients in the ongoing trial. In closing, let me reiterate that our focus here at Syros is unchanged, even as the reality in which we are operating has been so dramatically altered. We are encouraged by the strength of our programs and our platform and by the dedication of our people, which has been made abundantly evident in recent weeks. We believe that gene control medicines have the potential to make a profound difference in patients' lives.

And we are committed to executing with excellence as we advance our Phase II trial of 1425; continue to build on our leadership in selective CDK7 inhibition with 5609; and expand our preclinical and discovery efforts in monogenic diseases and cancer. With that, I will turn the call over to Joe to review our financial results for the first quarter of 2020.

Joe Ferra -- Chief Financial Officer

Thank you, Nancy. We ended the first quarter on a strong financial footing with $121.9 million in cash, cash equivalents and marketable securities, compared to $91.4 million on December 31, 2019. This increase reflects the $20 million upfront payment that we've received upon entering into collaboration with Global Blood Therapeutics; the $20 million that we drew down under the initial tranche of the Oxford loan facility; and $12.3 million through the sale of common stock under our ATM facility, all partially offset by cash used to fund our operating expenses in the first quarter. And based on these current plans, we believe our cash position is sufficient to support our business and capital requirements into 2022.

We are well positioned as we operate through this evolving landscape to advance both SY-1425 and SY-5609 through key clinical readouts, while continuing to invest in our preclinical programs and in discovery. We recognized $2.4 million of revenue in the first quarter of 2020, compared to $0.5 million in the first quarter of 2019. This $2.4 million consisted of $2.2 million under our collaboration with GBT and $0.2 million under our collaboration with Incyte. All revenues recognized in the first quarter of 2019 were under our collaboration with Incyte.

R&D expenses were $14.6 million in the first quarter of 2020, compared to $12.6 million for the same period in 2019. This increase was due primarily to the continued advancement of our clinical trials and preclinical programs. G&A expenses were $5.1 million in the first quarter of 2020, compared to $4.9 million for the same period in 2019. This increase was primarily due to an increase in employee-related costs, including salary, benefits and stock-based compensation due to increased headcount.

And finally, we reported a net loss for the first quarter of $17.2 million or $0.39 per share, compared to the net loss of $16.5 million or $0.49 per share for the same period in 2019. With that, I will turn the call over to the operator for questions. Thank you.

Questions & Answers:

Operator

[Operator instructions] We have a question that comes from the line of Phil Nadeau from Cowen and Company. Your line is open.

Phil Nadeau -- Cowen and Company -- Analyst

Good morning. Thanks for taking my question and congrats on your progress. I guess, first, just one that's in your comments about telemedicine and home visits. I guess what can be done at home through nurse visits or through telemedicine in the studies? And what does require visits to physicians' offices or hospitals? It would seem like certainly scans have to be done at hospitals, but how often does that have to happen versus blood draws or whatever that can be done at home?

Nancy Simonian -- Chief Executive Officer

Yes. Hey, Phil, thanks for the question. I hope you're doing well. I'm going to have David Roth answer your question.

David Roth -- Chief Medical Officer

OK. Yes, so it's a good question. Several of the visits, as you rightly point out, do involve procedures such as having a bone marrow biopsy in our leukemia trial or having CAT scans for surveillance in the 5609 trial in patients with solid tumors. So those are the types that would need to occur in the clinic.

To date, we have not had any significant changes in the schedules of visitation in order to have these very important assessments here. There are other visits, however, where there are just some quick check-ins just to make sure the patients are feeling well and doing fine and have an opportunity to provide information around their medications and the usage of their meds and diaries and to report symptoms. And those circumstances, an on-site visit may not be essential. So our team has done a whole bunch of things to help to safeguard the health and safety of the patients participating in the trials and also to protect the integrity of our data where possible.

And we've implemented some adjustments to the clinical trial procedures across all of our programs to achieve that effect. So the telemedicine that you mentioned is one of those, including things like local laboratories rather than having to go into the treatment center. There may be places that are closer to where a patient lives that might be easier, things of that nature. And so far, these have been readily easily implemented and we really see no significant impact to our studies.

And I just will point out one thing, which as Nancy mentioned, and it's really, I think, telling. But we recently completed in the enrollment in our relapsed/refractory arm of the 1425 trial. And I think that really goes a very long way to speaking about the conviction that our investigators have in helping to move this program forward and providing the opportunity for a generally well-tolerated treatment combination with azacitidine to patients with difficult-to-treat diseases.

Phil Nadeau -- Cowen and Company -- Analyst

That's helpful. And then maybe a second, really a question on 5609. I guess, I am actually a little surprised that all is on track there as well. It was our impression from other companies that things like Phase I trials were typically being delayed because of COVID.

Can you just speak a bit more about what gives you confidence that you'll have sufficient data to present in the fourth quarter?

David Roth -- Chief Medical Officer

So there's -- it's multifactorial. To start with, we believe 5609 has best-in-class potential based on its potency and selectivity for CDK7. And we know that CDK7 plays a very central role in interfering with processes, by inhibiting it with processes like cell-cycle control and abnormal gene transcription. And so I think that we are seeing a great deal of enthusiasm for this novel mechanism of action.

And I think that goes a long way to helping to sustain the ongoing progress we're making with enrollment into the trial. The other factor is that these are patients with advanced cancer who really have no alternatives. And so their diseases, which are associated with significant mortality or morbidities, just -- they don't wait for things like this pandemic to move aside. So by focusing on specialized Phase I oncology treatment centers, we found minimal impact to the conduct of the trials and also by moving into centers, which have dedicated units within them.

So even large tertiary care referral hospitals, which may be having slowdowns for some of its clinical trial -- research, are still prioritizing their efforts in addition to what they're very -- really obviously doing for COVID-related research, to the Phase I type oncology setting. And we're seeing that. So yes, we're very pleased that we've had minimal impact to our progress.

Phil Nadeau -- Cowen and Company -- Analyst

That's very helpful. Thanks for taking my questions and congrats again on your progress.

David Roth -- Chief Medical Officer

Thank you.

Nancy Simonian -- Chief Executive Officer

Thanks, Phil.

Joe Ferra -- Chief Financial Officer

Operator, are there any more questions?

Operator

Thank you. [Operator instructions] Our next question or comment comes from the line of Zegbeh Jallah from ROTH Capital. Your line is open.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Good morning, guys. Thanks for the update. Just kind of wanted to follow-up on some of the questions that we asked. So you mentioned that these patients were particularly sick, especially for patients treated with 1425.

I just kind of want to get a sense of -- are these patients being treated at cancer centers or are they being treated at general hospitals? And then another follow-up question there. I know that 1425 is dosed primarily but azacitidine isn't. So are these hospitalized patients or are these patients making regular visits to the clinic?

David Roth -- Chief Medical Officer

OK. So maybe I'll take that response. So thanks again for that question. Just to start with, these are patients who are seeking care in specialized treatment centers, they have either acute myeloid leukemia, which is often treated in Cancer Centers of Excellence, where there are sophisticated approaches that we're managing their diseases.

And in the context of a clinical trial, we tended to identify those sites who have leaders in the field with specialized expertise. So these are not necessarily community centers that are conducting on the clinical trial. And then with respect to the leukemias, I think that those patients are obviously required to come in for certain procedures to assess their ongoing disease status. The 1425 being oral medicine is also something that can be dispensed in quantity and taken on a daily basis at home when it's supposed to be administered.

Azacitidine is administered intravenously or subcutaneously. Those are typically given in the clinic, and those are things for which patients are showing up for treatments. That was one of the things that -- when we spoke earlier about -- to arrange for visiting nurses, who can potentially come to the patients' homes and help administer that outside the clinic setting. And that's all institutional dependent in -- depending on how they have their practices set up.

But just to reiterate, we've really seen no significant impact to the conduct of our trial, the ability of these patients to take their treatments and to provide the appropriate follow-up so that we can further interpret the data that's being generated in our studies.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Thank you. And then just another follow-up here, just a more general question. I'm not sure you would be able to answer this now. But we're kind of wondering for 5609, assuming that things are promising for multiple of the indications that you're pursuing, I wanted to know if you plan to pursue a basket approach or would you pursue individual indications in unique studies?

David Roth -- Chief Medical Officer

So again, that's a really good question. So as we've shown, some of our preclinical data has really demonstrated a breadth of activity for 5609 across a wide range of tumors. And we have purposefully selected tumor types, which are obviously supported by our preclinical data, but which also provide an opportunity to see early signals of clinical activity based on the high prevalence of RB pathway aberrations in those tumor types. And those are really specifically include breast cancer, lung cancer, ovarian cancer and colorectal cancer.

But we also have a group of patients who could have different histologies, provided that they have identified problems with their RB pathway before study entry identified, and that would also provide them with eligibility. So those are the approaches that we're taking right now. Part of what we will be doing, obviously, over time, is looking to see the types of activity we observed and correlating that intensively with mutations. We do have -- patients will be providing us with archival tissue and everyone is going to be getting assessments of either tumor or circulating tumor DNA.

So we're going to be really intensively characterizing them to see what specific abnormalities may or may not correlate with the responses and that can give us an opportunity to focus. So it's a bit premature right now to speculate on whether we're going to truly take a basket approach or not but some of our data can help to inform us on that. And the last point I'd like to make is that consistent with our philosophy for developing drugs in general, we know that drugs may have single-agent activity. And in fact, our preclinical models would support the potential for single-agent activity with our drug.

However, even when there is that opportunity drugs are, more often than not, used in combination context. And so we have a strategy in place to move forward as well in parallel with more combinations as well as single agents. And some of those details haven't been discussed publicly yet, but we do expect to be incorporating broad research opportunities into our plan as early as possible.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Thank you, David. I'm looking forward to the decisional updates at ASCO.

David Roth -- Chief Medical Officer

Thank you. Yes.

Nancy Simonian -- Chief Executive Officer

Thanks, Zegbeh, for the questions.

Operator

Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Ms. Nancy Simonian for any closing remarks.

Nancy Simonian -- Chief Executive Officer

Thank you, operator. In closing, I want to thank you all for joining us today and for your continued interest in Syros. We look forward to keeping you updated as we continue to navigate these uncharted waters and work to redefine the power of small molecules to develop medicines that provide a profound benefit for patients. I hope you and your families continue to stay healthy and safe.

Have a good day.

Operator

[Operator signoff]

Duration: 28 minutes

Call participants:

Naomi Aoki -- Vice President of Corporate Communications and Investor Relations

Nancy Simonian -- Chief Executive Officer

Joe Ferra -- Chief Financial Officer

Phil Nadeau -- Cowen and Company -- Analyst

David Roth -- Chief Medical Officer

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

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