Epizyme, inc (EPZM) Q2 2021 Earnings Call Transcript

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Epizyme, inc (EPZM)
Q2 2021 Earnings Call
Aug 9, 2021, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Hello and welcome to Epizyme's Conference Call. [Operator Instructions]

I would now like to turn the call over to Craig West, Vice President of Investor Relations. You may begin.

Craig West -- Vice President of Investor Relations

Thank you, Lorent, and good morning everyone. For those of you I have not yet met, my name is Craig West and I recently joined Epizyme as Vice President of Investor Relations with over two decades of experience in the field. My contact information can be found on the bottom of the quarterly update press release Epizyme issued this morning. That press release, as well as slides to accompany today's call, can be found in the Investors section of the Company's website at epizyme.com.

On the call with me today is Rob Bazemore, Epizyme's current President and Chief Executive Officer; Grant Bogle, our Incoming Chief Executive Officer; Matt Ros, Executive Vice President and Chief Strategy and Business Officer; and Dr. Shefali Agarwal, Executive Vice President and Chief Medical and Development Officer. As a reminder, today's discussion will include forward-looking statements related to Epizyme's current plans and expectations which are subject to certain risks and uncertainties. Actual results may differ materially due to various important factors including those described in the risk factors section of our most recent Forms 10-Q, 10-K, and other SEC filings.

These forward-looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to publicly update these statements.

At this time, I would like to turn the call over to Rob Bazemore. Rob?

Robert Bazemore -- President & Chief Executive Officer

Thank you, Craig, and welcome to Epizyme and thank you everyone for joining us on this call this morning.

Today, we have a robust set of updates from the quarter and on the business including important updates regarding our TAZVERIK launch, tazemetostat development, advances to our research pipeline, and exciting collaboration efforts. We will also be discussing changes that we are making to our operating plan to fuel our most important growth initiatives, while improving our capital position.

Before we get into the second quarter overview, I'd like to start with an important announcement that was press released this morning, immediately following our second quarter release. As you may have already seen, we announced that I will be transitioning out of my role at Epizyme as part of a thoughtful succession plan, after serving as the Company's President and Chief Executive Officer since 2015. At the end of last year, following TAZVERIK's U.S. approvals in epithelioid sarcoma and follicular lymphoma and finalization of the Company's next year five-year growth strategy, I started discussions with the Epizyme Board regarding the initiation of a succession plan. This was an important decision for me to be able to redirect my energy toward things that I needed to be able to focus on personally and I felt that this represented an opportunity for a new CEO to lead the Company's next chapter of growth.

As we moved into the first quarter and started to see signals that made us believe the effects of the pandemic may be improving, the Board and I resumed these discussions. At the same time, we also realized that there were some changes that we needed to make to improve our ability to access customers, to drive adoption of TAZVERIK in this challenging environment, and to ensure we maintain sufficient capital to continue funding our key growth driving programs. Over the last few months, I've been working closely with senior leadership of Epizyme and our Board of Directors to develop a revised operating plan for 2021 and 2022 that reduces our operating expenses, while at the same time, remains true to the four pillars of our long-term strategy as communicated in the Next EPIsode call in March.

Our revised operating plan includes a strategy to accelerate commercial adoption of TAZVERIK in the US, including some important changes to the commercial infrastructure that we launched TAZVERIK with and ensures that our resources are targeted at those programs that will provide the most significant value for the Company. As a result, we expect to reduce our non-GAAP operating expenses in 2021 from the previously communicated guidance of $235 million to $255 million to approximately $220 million to $230 million. This includes an approximate 20% reduction to our budgeted workforce in addition to other important reductions in external spending. We expect this plan to preserve our cash runway into Q4 of 2022 with multiple options available to us to further extend our operating capital as needed. This was not just an exercise to reduce our expenses, but rather a thoughtful set of decisions to ensure that our resources are properly gated and deployed, commensurate in the top line growth to ensure that we can continue to fund our highest priority growth opportunities. It's difficult to say goodbye to our colleagues who played such an important role in getting Epizyme to this stage, and I would like to personally thank them for all of their contributions.

As we finalize the revised operating plan that we'll discuss further on the call today, it became apparent that now is the right time to continue our succession plan discussions and for a new leader to take the reins and continue this next chapter of growth for Epizyme. With this in mind, we are fortunate to have found a trusted leader and someone intimately familiar with the Epizyme story and family. The Board and I are extremely pleased that Grant Bogle, an industry veteran as well as an Epizyme Board member since 2019 will be stepping in as Epizyme's Chief Executive Officer. As CEO, Grant will be creating a structure that allows him to be more closely involve with the commercial organization and their execution of the revised commercial strategy, including dissolving the Chief Commercial Officer role.

Grant brings deep commercial and operational leadership experience in oncology to his role and signifies the importance of the first pillar of the Company's five-year vision, maximizing the adoption of TAZVERIK as a backbone of therapy in ES and FL, while continuing to broaden our portfolio through new TAZVERIK indications and bringing novel epigenetic treatments into clinical development. Grant is the right leader, with the right experience, to take over at this very important stage in Epizyme's growth. Importantly, Grant shares my passion for Epizyme and he is aligned with our mission for both TAZVERIK and our long-term vision for the Company. While I am officially stepping down as CEO, I will be intimately involved in ongoing strategy and integration serving as a consultant and a trusted advisor for the Company and to Grant over the next 12 months, as he builds and executes upon Epizyme's vision.

On a personal note, I'm very grateful to our Board, our executive leadership team and to Epizyme's employees for their dedication to our mission and to the patients that we serve. While I need to focus my time and energy on other areas of my life that have become important to me, it's incredibly gratifying that together, we built an organization that addresses the needs of patients suffering with cancer. And I would not be leaving the organization now, if I did not believe it was the appropriate time with the appropriate personnel in place.

With that, I'm thrilled to have Grant with us on the call and to introduce him to you directly. Grant, please go ahead.

Grant Bogle -- Incoming Chief Executive Officer

Thank you, Rob, and good morning, everyone. I appreciate the warm welcome and the faith that you and the Board have placed in me to lead Epizyme to the next phase of growth. With my career immersed in commercial execution and working to ensure patient access to transformational therapies, I'm incredibly excited to take a leadership role in a company that has such a promising platform in TAZVERIK and a rich pipeline of important medicines.

As an Epizyme Board member, I'm grateful to have established relationships with the senior leadership of the Company and have had the benefit of participating in the development and approval of the long-term strategy. I'm fully committed to executing the five-year strategic plan that Epizyme rolled out in March. I also have a good sense of the challenges we have and continue to face since I've been providing support to Rob and the commercial team throughout the introduction of TAZVERIK in FL and ES. In the near term, as we continue to build Epizyme into a sustainable commercial stage company and accelerate the adoption of TAZVERIK, I will be deeply involved with the strategic and organizational changes and the commercial team that Rob will be discussing later.

My experience in challenging competitive markets in different tumor types, coupled with my deep understanding of the oncology provider market, will hopefully add value, so as to ensure Epizyme achieves its full potential and TAZVERIK becomes a backbone of therapy for patients with FL and ES and potentially other hematologic and solid tumors. Over the coming months, I plan to invest time engaging with each of the functions within Epizyme and gain a greater depth of understanding about the important and exciting work they are doing. I intend to listen to our talented employees and embrace their ideas as to how to continue to improve our ability to fulfill our mission.

In addition, I'll be spending time with other key stakeholders such as investors, analysts and provider organizations, with the goal of sharing how we intend to accelerate the growth and development of TAZVERIK and our pipeline of novel epigenetic targets. We believe our R&D efforts, led by TAZVERIK and now SETD2, have the potential to transform the treatment of cancer. I look forward to meeting all of you in the near future.

And with that, I'll turn the call back over to you Rob.

Robert Bazemore -- President & Chief Executive Officer

Thank you, Grant. And I look forward to partnering with you, as you take the baton and continue leading Epizyme where we all aspire to go.

As we look back in the last few months, we've made significant progress across several of the important pillars of our five-year vision for growth. Starting with our plans to expand the clinical development of tazemetostat, our priority clinical trials exploring multiple combinations and new heme and solid tumor indications are progressing exactly as planned. The expanded safety run-in for our confirmatory study 302 in relapsed and refractory FL is now fully enrolled and we are activating sites globally for the Phase 3 portion of the study, including in China, where our IND received clearance in late July. We're also taking steps to accelerate enrollment in study 1401, the important trial evaluating the combination of TAZVERIK and rituximab in patients with relapsed/refractory FL. And finally, we received FDA clearance of the IND in late July to initiate the solid tumor basket trial, which will evaluate tazemetostat in various combination regimens in patients with solid tumors. We plan to initiate enrollment in that trial this year.

We also made important progress across our pipeline. We recently received FDA clearance of the IND application for EZM-0414, our novel inhibitor of SETD2. And we'll be initiating a Phase 1 dose-finding study in the second half of this year. SETD2 represents an important histone methyltransferase target that addresses a well-understood multiple myeloma pathway. It is yet to be successfully drugged in the clinic and thus represents a novel differentiated oral investigational agent, with which we have already demonstrated preclinical activity across a variety of hematological tumors.

We believe our novel SETD2 inhibitor has potential in several settings. We're focusing our efforts on high potential research programs, with the goal of bringing three new programs into the clinic over the next five years, starting with SETD2, while maintaining the discovery research expertise that has allowed Epizyme to build a leadership position in the development of targeted epigenetic therapies.

We've also been active in our efforts to make tazemetostat available to patients outside the U.S. and you may have seen last evening that we were pleased to have jointly announced an important collaboration with HutchMed to bring TAZVERIK to patients in Greater China. In addition to licensing commercial and manufacturing rights to TAZVERIK in China, HutchMed will work with us to further expand the clinical development of tazemetostat, pairing it in additional combinations with their own portfolio of cancer treatments across a range of tumor types. This collaboration is also important, in that, it will provide access to patients in China for accelerating enrollment in our EZH-302 study and other global studies that we're working on together. We selected HutchMed as an ideal partner, committed to the long-term commercial success and broad development of TAZVERIK. This collaboration will provide Epizyme with an upfront and potential future milestone payments of up to $310 million over the life of the partnership, in addition to royalties in the mid-teens to low-20s on TAZVERIK revenue in China.

In addition, we are providing HutchMed with a $65 million in warrants to purchase Epizyme's stock, so that they can share the value that they create through the expanded development of TAZVERIK with their portfolio, fully aligning our objectives behind this partnership. For those who are interested, HutchMed will be holding a call to provide further details on this collaboration at 9:30 AM Eastern Time today.

Turning to our financials for the quarter, Epizyme achieved a combined total revenue of $13 million. This is attributed in part to a $5 million of collaboration revenue from our Japan partner Eisai and through significant interest from a pharma company, which acquired TAZVERIK for its planned combination clinical trials with an order of $3.2 million.

Commercial net revenues for TAZVERIK of $4.8 million did not meet our expectations, primarily related to a decrease in prescription demand in April and May. This specific drop in revenue in April and May was driven primarily by lower revenues in academic centers, we think, largely driven by the approval of CAR-T therapies and increased clinical trial activity.

During the quarter, we also experienced a significant increase in utilization of our patient assistance program, which was roughly 25% of bottles for the quarter. As a result, while patient demand grew 3% from Q1 to Q2 our net revenue was negatively impacted by an increase in PAP utilization. It is important to note that, net revenue in June rebounded with commercial revenue returning to March levels and July revenues reflecting a continued growth compared with June. In addition to this return to growth in revenue, there were other encouraging takeaways from the quarter that reflect our commercial efforts. We continue to add new prescribing accounts, and we're seeing continued growth by prescribing in large community practices. Growth in these large community accounts is critical for us to achieve our launch expectations in the long-term.

For market research completed in July, reflecting physician recall of their treatment of FL patients, TAZVERIK now has the highest share of prescriptions written in third line and later patients with EZH2 mutations, and share for TAZVERIK increased in wild-type and untested patients in third line and later as well. These are positive signals for the continued intent to prescribe and for the adoption of TAZVERIK.

On our last earnings call in May, we described what we believe to be some encouraging signals emerging in the market at the end of the first quarter that made us hopeful about a gradual return to normalcy for our ES and FL markets overall. The reality is that, oncology has been one of the slowest therapeutic areas to rebound. Although we hear anecdotally that FL patients have started to return to their oncologists, new prescription volume for all therapies in the second quarter remained down by about 20% to 30% compared to pre-COVID levels, very similar to what we observed in Q1.

We've also not seen a meaningful improvement in access to prescribers by our field-based team. While some accounts are reopening, others are remaining close to sales representatives which has impacted TAZVERIK education efforts in both large community centers and academic institutions. We believe this may be the new norm for interacting with oncology practices going forward.

In response to these challenges, we continued to face this launch. We're making some important changes to our commercial strategy, and our commercial organization to more favorably impact TAZVERIK adoption and continue to establish TAZVERIK as the backbone of FL therapy. With this revised strategy, we're focusing on three key changes to drive growth. First, we're specifically focusing on accelerating growth and adoption in the most important large community oncology clinics.

Second, we're proactively promoting mutational testing as an important tool for making EZH2 status, top of mind for physicians whenever a patient experiences relapse, capitalizing on our strength in patients with EZH2 mutations, while also increasing adoption in the EZH2 wild-type and untested patients as well.

And third, we're adding specialized personnel and creating innovative programs to better access key decision-makers directly, at all levels of oncology accounts. We're supporting these efforts with enhanced digital approaches to educate both physicians, as well as patients. In order to accelerate adoption in community clinics, we've taken a cross-functional approach to partnering with these top accounts. This approach utilizes support from the field marketing, home office, and medical in a coordinated effort to identify appropriate patients and educate providers on TAZVERIK. We are also fielding a new team of account specialists, whose role will be to engage with large oncology practices at the executive level, to support TAZVERIK adoption from the highest levels down into the clinical practice.

The MSL team is also refocusing their efforts on community practices to educate on the TAZVERIK data and to involve many of these practices in our combination clinical trials. These community physicians typically use rituximab and rituximab-based combinations repeatedly for their relapsed FL patients. Our goal is to ensure that, TAZVERIK is top of mind as a drug with a novel mechanism of action and that they ultimately consider TAZVERIK as a treatment option for these patients either as a monotherapy or in combination with rituximab or other treatments based on the data that we're generating. Over time and with greater experience, we believe that physicians will embrace TAZVERIK given its efficacy, safety and convenience as a go-to agent in earlier treatment lines, translating into better patient outcomes, and longer durations of treatment.

This brings us to the second strategy, regarding reinforcing the importance of EZH2 testing proactively. Our market research indicates that a number of physicians testing as well as the percentage of patients tested for EZH2, continued to increase since the approval of TAZVERIK. While most physicians have been able to readily access testing, about one-third report that they are unsure how to do so. So to make this simple for physicians, we recently launched a collaboration with Quest Diagnostics to make EZH2 testing readily available at no cost to the patient called EZH2Now.

EZH2Now testing should help TAZVERIK gain more traction with physicians for two reasons. First, the more physicians are thinking about EZH2 status in the relapsed/refractory patients, the more top of mind TAZVERIK should be in their treatment consideration, regardless of mutant or wild-type status. The second, utilization of the testing program requires physicians to contact our reps, which we believe will improve our access to both community and academic physicians. As part of our refined strategy, we're also adding precision medicine specialists to our commercial organization to aid in educational efforts with regard to patient identification and to optimize utilization of the EZH2Now program. Access to our customers has also been a significant challenge during the pandemic and while it's improved some, we think this is probably the new norm and we needed to make aggressive moves to get our messages to providers. Therefore, in addition to leveraging EZH2Now testing, we're adding a team of thought leader liaisons, specifically focused on engaging with clinical and business decision makers, among the top oncology accounts. Since fielding a pilot group of this role, we've already seen a tremendous increase in high-level customer engagement.

We're also shifting resources to implement novel digital approaches to commercialization, which should improve our ability to reach both healthcare practitioners and patients directly. Our direct-to-patient campaign will be fully launched in Q3, focused on empowering appropriate patients to discuss TAZVERIK with their physicians and to better understand TAZVERIK as a treatment option.

To bowl it down, the key changes that we're making in our commercial organization is, we're adding precision medicine specialists to aid educational efforts around patient identification and EZH2 testing. We're adding thought leader liaisons to improve our ability to access, engage and educate clinical opinion leaders and business decision makers. We're reducing the number of traditional sales roles, reflecting the access challenges that we've cited. And overall, we're optimizing our traditional field sales team for the oncology market environment today, adding new personnel with complementary skills and backgrounds to augment access and support our customers.

This structure is now more focused on our growth opportunities for TAZVERIK. We're optimistic that our refined commercial strategy, our expanded opportunities for customer engagement and increased patient physician interactions will all positively impact TAZVERIK's success. Ultimately, our goal is to continue to expand the universe of physicians consistently prescribing TAZVERIK irrespective of mutation status. In this regard, we recognized the importance of generating new data from our ongoing clinical trials combining TAZVERIK with standard of care approaches such as rituximab and R2, supporting our goal of advancing TAZVERIK as a backbone of therapy in FL.

I'd now like to turn the call over to Shefali who will provide an update on our tazemetostat development efforts. Shefali?

Shefali Agarwal -- Executive Vice President, Chief Medical and Development Officer

Thanks, Rob, and good morning, everyone.

Across the board, our clinical programs to support the expanded utilization of tazemetostat, all continue to make progress and we continue to receive a significant amount of inbound interest from potential investigators looking to sponsor additional studies on their own, highlighting the scientific community's enthusiasm for evaluating tazemetostat in a range of solid tumor and hematological malignancies.

I'm also very excited about the opportunity to initiate the first clinical trial of our novel SETD2 inhibitor in the second half of this year, following the recent FDA clearance of our IND. We believe this novel, first-in-class agent, has the potential to provide a new treatment option for patients in need starting with multiple myeloma and expanding further from there.

Looking back on the second quarter, we completed enrollment of all Phase 1b cohorts necessary, but the agreed upon study expansion in our EZH-302 Phase 1b/3 confirmatory study of TAZVERIK in combination with R2 in relapsed refractory FL patients. We are following these patients and will submit our findings to FDA after the required three-month follow and plan to initiate enrollment in the Phase 3 portion of the trial in the fourth quarter.

As you may recall, during the FDA's final review of our Phase 1b safety run-in filing and proposed Phase 3 protocol, the agency requested we enroll a few more patients in the 600-milligram and 800-milligram cohorts to ensure that the effect of combining tazemetostat with R2 was well characterized given the relatively quick completion of our prespecified Phase 1b design without any dose-limiting toxicity.

In this review, the FDA also agreed with a planned second interim analysis, that if successful, would allow us to read out efficacy, prior to completion of the trial. With almost 40 patients now enrolled in the Phase 1b safety run-in, including those who are rituximab refractory and POD24, we continue to see a very high response rate among evaluable patients and we plan to provide an update on the safety and efficacy findings in these patients at ASH later this year.

To-date, the combination of TAZVERIK plus R2 has been evaluated in 36 patients in the Phase 1b lead-in portion of the EZH-302 trial. Safety profile of tazemetostat, 800-milligram BID plus R2 is consistent with that described in the respective reference safety information document. Most notably, we are able to go to the highest dose of 800 milligrams and did not see any DLTs reported during the first cycle. All of the 36 patients enrolled so far, 17 patients are evaluable for efficacy based on the availability of tumor scans.

All 17 patients responded to treatment with six patients having a complete response and 11 patients having a partial response. This is of course preliminary activity, but we are very encouraged by the opportunity of TAZVERIK to potentiate the effect of R2. For all responsive evaluable patients, the duration of therapy has been in the range between two months and 10 months of therapy. The study is currently ongoing and we are following patients to obtain more data. While this is a small number of patients to see, these trends in clinical practice is exciting.

As we finalize the safety run-in portion of the trial, reducing the time to activate as many sites as possible globally to ensure we can enroll the trial quickly once approved. The EZH-1401 study evaluating TAZVERIK plus rituximab in relapsed/refractory FL patient is actively enrolling patients and the new sites are being activated including a large network of community oncology centers.

By doubling the number of sites involved in this trial, we'll be able to generate combination data more quickly, which is key to broader TAZVERIK adoption and realizing the second pillar of our long-term growth strategy. We plan to share the full data set for the study at a medical conference mid next year and we will provide updates on the study progress as data becomes available.

Separately, both cohorts of the LYSA study, evaluating TAZVERIK in combination with R-CHOP in frontline FL and diffuse large B-cell lymphoma or DLBCL are nearly two-thirds enrolled. Our IND application for the proposed solid tumor basket study received a clearance in July and we remain on track to initiate both proposed basket studies, evaluating multiple combinations that has hematological and solid tumors in the fourth quarter of this year. In Europe, we expect to define the path to regulatory submission later this year.

Our Phase 1b/2 EZH-1101 study of tazemetostat in metastatic castration-resistant prostate cancer, or mCRPC, has enrolled well reflective of the interest in tazemetostat in potentially addressing this typical population and now is over one-third enrolled. We will present updated safety and efficacy data from the study's Phase 1b safety run-in including DOR, PFS, biomarkers etc. as part of a poster presentation at ESMO in September. The randomized portion of the study is open label, evaluating tazemetostat in formation with enzalutamide compared to enzalutamide alone.

Now, turning to our SETD2 program EZM-0414. We have been approved to advance into the clinic following clearance of the IND by the FDA. We are on track to initiate the first in-human study later this year and are in the process of study start-ups including site activation. This study is intended to evaluate the safety and optimize the dose and schedule of EZM-0414 in multiple myeloma and DLBCL patients.

Once we have optimized the dose, the study will be further expanded to three patient cohorts t(4;14) multiple myeloma, non-t(4;14) multiple myeloma and DLBCL. As you can see, with the revised operating plan that Rob described earlier, we are continuing to fund and advance the program that will provide significant value to patients and to our shareholders with trials that produce a steady stream of new data.

At this time, I'd like to pass the call to Matt. Matt?

Matthew Ros -- Executive Vice President, Chief Strategy and Business Officer

Thank you, Shefali, and good morning.

As Rob indicated we've taken further steps to streamline expenses and extend our operating capital to fund the most important value-creating initiatives. We ended the second quarter with $244 million in cash, cash equivalents and marketable securities. This of course does not include the upfront payment from our collaboration with HutchMed that was just announced.

Our total non-GAAP operating expenses for the second quarter of 2021 were $71.2 million, of which R&D and SG&A accounted for approximately $35 million and $34 million, respectively. Epizyme recorded second quarter 2021 revenues of $13 million, consisting of $8 million in product revenue and $5 million of collaboration revenue. Product revenue included $4.8 million of TAZVERIK ES and FL commercial net revenue and $3.2 million of TAZVERIK net revenue related to an order from a pharmaceutical company for its planned combination trials.

Epizyme also recognized $5 million of collaboration revenue in Q2 from our agreement with Eisai. As part of our agreement with HutchMed, Epizyme will receive a one-time upfront payment of $25 million in Q4. We also anticipate receiving the first milestone payment from this collaboration, connected to initiation of enrollment of patients from Greater China into study 302 later this year.

Based on our refined operating plan and structure, we expect that our current cash will fund operations into the fourth quarter of 2022 and are lowering our non-GAAP adjusted operating expenses guidance for 2021 from $235 million to $255 million to the new range of $220 million to $230 million and we expect that to have a greater impact on our full year budget for 2022.

We reduced our budgeted headcount by 20%, including 11% of our current employees, resulting in an estimated severance and termination cost of approximately $2 million. We expect to report these charges in the third quarter of 2021. As Rob mentioned earlier, we will make new investments with a stage-gated approach, based on the evolution of TAZVERIK adoption and the progress of our clinical studies. We have also a number of options available to us to enhance our cash runway to support our operating plans and value-creating initiatives well into the future.

I'd like to turn the call back over to Rob for closing comments. Rob?

Robert Bazemore -- President & Chief Executive Officer

Thank you, Matt.

We shared a lot of information with you today. Facing into the second half of the year, we've made some important changes to our commercial strategy and organizational structure that we believe will be an effective response to the oncology market we found ourselves launching TAZVERIK and allowing us to bend the curve of TAZVERIK adoption.

We also believe the additional changes we made to our operating plans should provide the capital flexibility to continue execution of the most important programs across the four pillars we've laid out on our Vision Call in March which include maximizing commercial adoption of TAZVERIK, building on TAZVERIK's pipeline and our drug potential, expanding our pipeline and portfolio and collaborating to expand our reach to patients and building incremental value.

I am very proud of the work that we've done over my last six years here to transform Epizyme into a commercial stage company and to move our next program into the clinic. I want to thank our Board of Directors and all of our shareholders for their support through the many ups and downs that companies like our space and express my profound gratitude to all of our employees for their tireless efforts on behalf of the patients that we serve. I couldn't be more confident now to hand the reins over to a leader who I know will make a very positive imprint on the next chapter of Epizyme story.

Operator, can we now open the line for questions?

Questions and Answers:

Operator

[Operator Instructions] And your first question comes from the line of Peter Lawson from Barclays. Your line is open. You may ask your question.

Peter Lawson -- Barclays -- Analyst

Hi, Rob. Thanks for taking the questions. It's always been a pleasure speaking with you and so all the best from Barclays.

Robert Bazemore -- President & Chief Executive Officer

Thank you.

Peter Lawson -- Barclays -- Analyst

Just on the deal last night, are they deals that you would be contemplating for kind of international TAZVERIK revenues that we should be thinking about? And then on the $3.2 million in the quarter for kind of pharma partner revenues, who is that to or is that to one party and -- and anything you can disclose around that deal would be great.

Robert Bazemore -- President & Chief Executive Officer

Maybe I'll start with the second part of the question. We've not been allowed to disclose who the partner is. But as you know, Peter, we just talked about before, there have been a number of companies, who've been interested in partnering their compounds clinically with TAZVERIK and we are pursuing several of those. The particular one that we disclosed in this earnings call, doesn't involve any other rights. This is purely a sale of product for them to be able to use as a combination drug in combinations that they are developing. But there has been a significant amount of effort and interest in developing drugs along with TAZVERIK and it's actually what goes behind the HutchMed partnership. As I mentioned on the call, a big part of this is being able to get TAZVERIK approved and commercialized in China. But a big part of the deal for both companies, for us and for HutchMed has been the ability to expand the clinical development of TAZVERIK through new indications, the new compounds we're now developing today, in new tumor types and new indications.

We've always been a company, as you know, who have used partnerships and collaborations as a way of building on our clinical development expertise for TAZVERIK and we've done that for some time. So, we had indicated that once we were approved in the U.S. that we would shift our attention to being able to bring TAZVERIK to patients outside of the United States. So this collaboration with HutchMed is an important step in that direction.

Peter Lawson -- Barclays -- Analyst

Got you. Thank you. And then just on the pharma partner revenues, is there any way you can kind of provide guidance around that if that's kind of a consistent number quarter-by-quarter or if that's just sporadic?

Robert Bazemore -- President & Chief Executive Officer

It's kind of hard to know. Peter. I mean, we have an idea of what they're planning to do, but obviously that's controlled by a different company. And so we never try to guide to those kinds of things or put it into our cash runway. But I think it's one example that it illustrates a significant amount of interest and being able to work clinically with TAZVERIK in combinations.

Peter Lawson -- Barclays -- Analyst

Great. Okay. Thank you so much.

Robert Bazemore -- President & Chief Executive Officer

Thank you, Peter.

Operator

And your next question comes from the line of Michael Yee from Jefferies. Your line is open. You may ask your question.

Michael Yee -- Jefferies -- Analyst

Hi, good morning. Thanks for the question, and good morning to Rob and Grant. We just had a question around the underlying sales and demand driven by the $4.8 million. Specifically you'd said that sales had sort of declined in the back part of the quarter, but then rebounded and was higher than the higher levels or the highest levels of Q2. Can you just sort of revisit what you were saying about the trajectory and that is for the -- and does that mean Q3 should be significantly higher and Q4 should be higher than that? So maybe just talk about what happened there and why you wouldn't expect that that could still be an ongoing headwind and what you expect for the rest of the quarters. Thank you.

Robert Bazemore -- President & Chief Executive Officer

Yeah. Thank you, Mike. It's a great question. So, what we said was that the overall demand for TAZVERIK increased by about 3% quarter-on-quarter from Q1 to Q2. However, the net revenue was down from that because of the impact of an increase in patient assistance program utilization. We saw an impact of patient utilization -- patient assistance program utilization of about 15% in the first quarter and it jumped to about 25% this quarter. That's not unusual to see.

You can see spikes and -- and troughs in the use of PAP. It's usually related to how much funding is available and the independent foundations patients utilize those. We've also been successful over the last year, over the last months and being able to ultimately convert some of those PAP patients into commercial utilization. We expect to be able to convert some of those patients over. The trend that we saw in Q2, it was largely due to a dip in demand in April and May, and then, we saw that return to growth in June. And in April and May and specifically, we saw a dip in demand among the academic institutions. We think that largely came back and we look at market shares, and we look at what's happening within those institutions, we think that it was largely attributed to a spike in demand for CAR-T once they were approved, CAR-T therapies and also a big increase in demand for clinical trials, number of patients being involved in clinical studies. And as you know, a big portion of our business has always come from the academic institutions.

We were encouraged though that all through that same period, we continued to see growth among the community accounts. We grew at about 22% in the second quarter among the community practices, which is a big positive for us because that's necessary for the long-term health and growth of TAZVERIK. So, we did see the rebound in June that we spoke about. It was about a 38% growth from May, and then, we continue to see an increase in utilization in July, even over June.

So, I'm hesitant to predict as to what that's going to mean for the third quarter and moving forward. Obviously, there are a number of new dynamics that we're dealing with COVID, I think that we're all trying to realize just what impact that's going to have on our ability to access customers, patients getting in and to see their physicians, but we were encouraged that these signs along with increases in market share for both our mutant patients, as well as wild-type and untested patients, all increased in the second quarter. So we believe that these are good signs that there continues to be adoption of TAZVERIK even in this difficult market that we're competing in.

Michael Yee -- Jefferies -- Analyst

Got it. Thank you.

Operator

And your next question...

Robert Bazemore -- President & Chief Executive Officer

And then, the final thing, Mike, I would say that just as an additional point. The changes that we're making that we announced on the call today are actually designed to specifically address those challenges. So, we believe that some of the things that I talked about, things like accessing customers likely is not going to change that much over the near term. And so, some of the new roles that we created, some of the things that we're doing in the new strategy, is actually specifically targeted at addressing those challenges to further stimulate the adoption of TAZVERIK going forward.

Operator

And your next question comes from the line of David Lebowitz from Morgan Stanley. Your line is open. You may ask your question.

Robert Bazemore -- President & Chief Executive Officer

Hey, David.

David Lebowitz -- Morgan Stanley -- Analyst

When you look at the demand for TAZVERIK most recently, is it being affected by limited just by doctors not doing EZH2 screening, are they not giving consideration at this point to much wild-type usage? Curious to hear your thoughts.

Robert Bazemore -- President & Chief Executive Officer

I'll start and I'll let Shefali add in as well from a clinical perspective, but I think one of the biggest challenges that we've had, David, is just educating physicians on the data and the label for TAZVERIK. If physicians don't really have a working knowledge, a really good understanding of the data, for instance, things like progression-free survival, which is actually one of the big benefits. It was consistent across wild-type and mutant patients. It's actually not in the label because that was a key -- it's a time-based endpoint, and then, a single-arm study that's not allowed into the label.

So really getting deep into the data and understanding the totality of the profile is important to have direct access to customers. And we think between that, as well as helping them understand the label, that direct access is going to be very important. And that's why some of these new roles that we're creating, we're doing. I think anytime you have a drug that launches in a space like this, where you have many patients, who failed many lines of therapy, some of the first patients you're going to get are later line patients and those patients may not have the same benefit that earlier line patients will and they'll have shorter durations of treatment while are continuing to see growth as well in the third line and even second line, particularly in patients, who have EZH2 mutations.

So I don't think there's any one specific area. I would say this is -- it's a factor of launching into a very difficult complex market. It's largely been impacted by COVID, where the patients themselves aren't coming in for treatment, the prescriptions for oncology treatments in these FL patients overall is still down. I was hoping to see coming out of Q1, we'd see that number bounce back up, but so far it hasn't. It actually looked very similar to Q1. And our access to physicians hasn't changed. And so that's why we're taking the steps I talked about in the call, so that we can directly address those challenges. And I'll let Shefali speak further.

Shefali Agarwal -- Executive Vice President, Chief Medical and Development Officer

Hi, David. So as Rob mentioned, it's absolutely true. I think it's important for physicians to understand the data. And as you think about TAZVERIK, one of the misconception is that it's EZH2 mute only. But if you look at the data itself the totality of benefit we saw in both mute and wild-type and whether you look at PFS, duration of response and also safety profile. So, I think one of the things that I'm personally involved which is educating the physicians. I talk to them day-to-day and trying to make them understand the value of our data in both mute and wild-type, as well as just understanding the label itself.

So I think those are the things that we are working on and as Rob very clearly said, that is our main goal. To be able to educate the physicians, get familiar with the data and so that -- also have access to these physicians. Although, we say that there is changes in patients coming in, but it's not such a big change that you can see it's gradual. So I think those are some things that we're focusing on, as a team.

David Lebowitz -- Morgan Stanley -- Analyst

Thank you very much for taking my questions.

Operator

[Operator Instructions] Your next question comes from the line of Andrew Berens from SVB Leerink. Your line is open.

Andrew Berens -- SVB Leerink -- Analyst

Hi, thanks. Just a couple of questions on the demand. What percentage of the patients that got a TAZVERIK script or EZH2 positive, negative or unknown and then, what percentage of patients are being prescribed TAZVERIK earlier than the third line? And then, if you have some data on how long patients are staying on the drug on average, that would be appreciated. Thank you.

Robert Bazemore -- President & Chief Executive Officer

Thank you, Andy. With regards to the first question, what percentage of patients are EZH2 wild-type mutant and unknown, that's a difficult answer for us to get because remember a big portion of our prescriptions go through the specialty pharmacy and a lot of others go through specialty distributors. When that happens that goes directly to hospitals or it goes to physicians. We don't have access to the data on the patients.

What we do realize and we do research where we ask physicians what their recall is of the patients that they are treating and what portion of patients are getting TAZVERIK in different patient types. We have over a third share of the EZH2 mutation population, which is actually very high considering, where we are in the launch -- launching in a pandemic. So we have the highest share of all treatments in relapsed, refractory FL and patients, who have EZH2 mutations in the third line and later, about 13% in the patients who have wild-type EZH2 and that's total share, that's not new patients share. So those are pretty good numbers considering that we launched into a pandemic with limited ability to reach our customer. We're also penetrating into the second line. We're seeing increased utilization. We've seen our share go up there, but it's been predominantly in patients, who have EZH2 mutations, as you might expect since it's being used mostly as monotherapy.

And then as -- with regards to the duration of treatment, when you put these out on a -- swim lane plot, it looks actually very similar to what we saw in the Phase 2 study. You have some patients, who come on, who stay on for a very long period of time, you have some who come on and have a relatively short duration of treatment because they were late line, they were very severely ill patient. I actually think that we may be getting more of those patients now as a industry, not just us, in particular, because many of these follicular lymphoma patients are coming back after having been away from their physician's offices for many, many months and physicians have told us this.

So I think some of the patients that are coming back in for retreatment, whatever they're coming back in and getting treated on are not the same type of severity as they would have been pre-COVID. But overall, if you look at the swim lanes, it looks very similar to what we saw in the Phase 2 study that we used for registration.

Andrew Berens -- SVB Leerink -- Analyst

Okay. Thank you very much. Appreciate it, Rob.

Robert Bazemore -- President & Chief Executive Officer

Thank you, Andy.

Operator

Your next question comes from the line of Peyton Bohnsack from Cowen. Your line is open.

Peyton Bohnsack -- Cowen -- Analyst

Hi, this is Peyton on for Joe. Good morning. Thanks for taking our questions. We were wondering if you could provide a little more detail on the updated marketing strategies like specifically what the digital approaches look like, are those just going to be doing more Zoom calls? And I know you mentioned in the prepared remarks where you said there is going to be the direct-to-patient campaign will be fully launched in Q3. Does this include the healthcare providers and patients or is it just patients only? And then I have a follow-up. Thank you.

Robert Bazemore -- President & Chief Executive Officer

Okay. So it's a good question. For the digital approach to the healthcare practitioners, it's not just the Zoom calls, that's actually been an approach that we've taken from the outset. We're finding that those are actually effective in some cases and less effective in some cases because the healthcare providers have been inundated.

Now these are actually better digital approaches to do direct education of physicians in ways where they can get continuing education of credit, engages them directly in their offices or with groups. We have found a way to digitally communicate with physicians in larger groups, essentially repricing [Phonetic] what would have been a face-to-face dinner program with a digital version of doing that as well as finding different ways to get materials to them that they can read and look at in their own time.

With regards to the patient effort, this is a targeted effort to be able to identify patients at the moment that they are seeking treatment. So in addition to educating them on TAZVERIK and educating them on what to think about and look forward in a relapse, so they should be seeing their physician. Keep in mind, many of these patients have been seeing their physicians virtually and they may not bring up their symptoms or they may not bring up signs that they're relapsing with the physician because they don't know how to express those. And if that doesn't happen, the physicians then don't invite them to come into the office. They will just continue to see them virtually. And we know physicians typically don't change therapy based on a virtual visit.

So there's those kinds of tools to educate them and what to look for, how do you know your disease is progressing. And then also tools to help identify patients that are getting close to their physician's offices, and these are geo-targeting types of initiatives. So when they get close to their physician's office or to a hospital, they are automatically prompted with information about TAZVERIK, so it's top of mind when they go in. So there's really interesting things that we're doing to make sure TAZVERIK is top of mind as they are talking with their physician about their next treatment.

Peyton Bohnsack -- Cowen -- Analyst

Cool. That's very helpful. Then also, it's kind of a follow-up. Just any change to your commercial and marketing strategy, will this be global or is this only going to be in the US?

Robert Bazemore -- President & Chief Executive Officer

We are implementing this in the U.S. That's the only country, where we're currently approved for TAZVERIK. My guess is that HutchMed would likely take advantage of some of the learnings that we've had, as they launch in China once they have approval in China. But for now, our approval is only in the U.S. So all of the things that I talked about today are in the U.S. market.

Peyton Bohnsack -- Cowen -- Analyst

Okay. Cool. Thank you.

Operator

Excuse me, presenters, there are no more phone questions. You may continue.

Robert Bazemore -- President & Chief Executive Officer

Hey well, thank you all for joining us today. We hope that you all have a safe day and a healthy day, and have a great day, everyone. Take care. Bye-bye.

Operator

[Operator Closing Remarks]

Duration: 52 minutes

Call participants:

Craig West -- Vice President of Investor Relations

Robert Bazemore -- President & Chief Executive Officer

Grant Bogle -- Incoming Chief Executive Officer

Shefali Agarwal -- Executive Vice President, Chief Medical and Development Officer

Matthew Ros -- Executive Vice President, Chief Strategy and Business Officer

Peter Lawson -- Barclays -- Analyst

Michael Yee -- Jefferies -- Analyst

David Lebowitz -- Morgan Stanley -- Analyst

Andrew Berens -- SVB Leerink -- Analyst

Peyton Bohnsack -- Cowen -- Analyst

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