Syros Pharmaceuticals, Inc.

Good morning, and welcome to the Ciros Pharmaceuticals First Quarter 2022 Financial Results Conference Call. At this time, all participants are in listen-only mode. This call is being webcast live on the Investors and Media section of Ciros' website at www.ciros.com. Please be advised that today's call is being recorded. At this time, I would like to turn the call over to Courtney Solberg, Manager of Corporate Communications and Investor Relations at Ciros.

Thank you. This morning, we issued a press release announcing our first quarter 2022 financial results and a broader business update. The release is available on the investors and media section of Cirrus's website at www.cirrus.com. We will begin the call with prepared remarks by Dr. Nancy Simonian, our chief executive officer, and Jason Haas, our chief financial officer. We will then open the call for questions. Dr. David Roth, our Chief Medical Officer, Kristen Stevens, our Chief Development Officer, Dr. Eric Olson, our Chief Scientific Officer, and Conley Chee, our Chief Commercial Officer, are also on the call and will be available for Q&A. Before we begin, I would like to remind everyone that statements we make on this 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 and our quarterly report on Form 10-Q for the first quarter that we filed this morning and any other filings that we may make with the SEC in the future. Any forward-looking statements made on this call representing 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.

Thank you, Courtney. Good morning, everyone, and thank you for joining us. The first quarter of 2022 was very productive for Cirrus. as our team continued to execute against our goal of discovering and developing small molecule medicines for patients with cancer and monogenic diseases. We are very excited about the upcoming months, as we expect to have important clinical data readouts. To start off, our select MDS-1 Phase III clinical trial of temiberitine and higher-risk MDS continues to be on track, and we look forward to reporting our pivotal data in late 2023 or early 2024, giving us the potential to file a new drug application with the FDA in 2024. Tamiberitone has the potential to set a new treatment paradigm for the approximately 30% of RARA-positive higher-risk MDS patients by offering them a convenient oral therapy that can deliver high complete response rates without sacrificing safety or tolerability. Despite successful advancements in blood cancers more broadly, MDS has largely lagged behind in drug development. Hypomethylene agents, or HMAs, remain the existing standard of care while providing limited efficacy. And aside from HMAs, no new therapies have been approved in over a decade. We believe tamiberitine has the potential to be the first therapy for a targeted population in high-risk MDS and has the opportunity to change the standard of care. We are also looking forward to providing safety and clinical activity data from the safety lead-in portion of the select AML1 trial of tamiberitine in the second half of this year. The Phase II trial will be evaluating tamiberitine combined with venetoclax and azacitabine compared to venetoclax and azacitin alone, which is the standard of care. We believe tamiviratine has the potential to deliver a significant benefit to the approximately 30% of newly diagnosed unfit AML patients who are RARA positive. Our translational and clinical data support the potential for the RARA biomarker to enrich for patients more likely to respond to tamiviratine and for whom the standard of care may be suboptimal. So we are excited about tamiberitine's potential, and expected data from our select AML1 trial will provide key insights into the safety, efficacy, and compatibility of tamiberitine and azacytidine and venetoclax. Additionally, we expect to provide pharmacokinetic and safety data mid-year from our dose confirmation study of 2101 in APL. As announced today, given the current market conditions, We do not intend to advance 2101 into a Phase III trial until we have secured additional capital. However, we remain confident in the 2101 program. We believe it has the potential to replace the standard of care for APL patients by offering a significantly reduced treatment burden and increased access to therapy without sacrificing clinical benefit. We also plan to announce safety, and clinical activity data from the safety-leading portion of the 5609 trial in relapsed pancreatic cancer in the second half of 2022. The 5609 pancreatic expansions are designed to establish proof-of-concept in combination with chemotherapy using a doublet regimen of 5609 and gemcitabine and a triplet regimen of 5609, gemcitabine, and abraxane. By exploring both the doublet and triplet regimens, we believe this will deepen our understanding of the combination tolerability profile as well as clinical activity while maximizing the opportunity in an area of high unmet need. Currently, the only approved agent for second-line pancreatic cancer is Onavid plus 5-FU-leucovorin, which offers progression-free survival of just three months. We believe 5609 in pancreatic cancer represents a large market opportunity and has the potential to make a big difference in these patients' lives. As a reminder, in the Phase I dose escalation, 5609 showed promising clinical activity with good tolerability as a single agent in heavily pretreated patients, most notably in patients with pancreatic cancer and with K-resputations, including prolonged stable disease, along with tumor shrinkage and tumor marker reductions. We believe this single-agent activity is clinically important, and coupled with our preclinical data, which showed regressions in KRAS mutant models and potentiation of gemcitabine antitumor activity, sets the stage for our current approach of evaluating 5609 in combination with chemotherapy. We look forward to sharing safety data and the initial clinical activity data from the trials at the time of the data readout. At the upcoming ASCO and EHA conferences, we are looking forward to sharing trial-in-progress abstracts detailing the designs of our 5609 trial in pancreatic cancer, our select MDS-1 trial, and our select AML-1 trial. As announced this morning, given the current market environment, we are deep prioritizing the development of 5609 in hematologic malignancies at this time. We continue to believe that 5609 has the potential to make a transformative impact on patients with many difficult-to-treat tumors. Beyond the work we are doing in pancreatic cancer, we are also pursuing the development of 5609 in BRAF mutant colorectal cancer, or CRC. Based on the agreement we entered into with Roche in August of last year, 5609 in combination with atezolizumab is being explored in patients with BRAF mutant CRC. Under the terms of the agreement, we are supplying 5609 for a combination dosing cohort in the Roche-sponsored ongoing phase 1, 1B intrinsic trial. This arm of the study is expected to be open for enrollment in the first half of 2022. The milestones expected this year and beyond will help inform next steps for each of our programs and will provide insights on the potential of our investigational medicines to change the standard of care for patients. Finally, turning to our gene control discovery engine. In April at AACR, we presented a poster on our selective CDK12 inhibitor program, detailing the potency, selectivity, and antitumor activity of one of our lead compounds. This CDK12 inhibitor impaired DNA repair, caused cell cycle dysregulation and genomic instability, leading to tumor growth inhibition and apoptosis as a single agent in preclinical models. Additionally, this CDK12 inhibitor induced tumor regressions in small cell lung and breast cancer in vivo models and demonstrated activity in combination with lorbinuctin in a small cell lung model as well as Olaparib, showing anti-tumor activity and a PARP inhibitor-resistant patient-derived xenograft model of ovarian cancer. Taken together, these data support our belief that CDK12 inhibition could play a key role in the treatment of breast, lung, and ovarian cancer. We look forward to naming a development candidate from our CDK12 program in the second half of the year. We are confident that our clinical pipeline, which is focused on advancing our ongoing phase two and three trials of Tamivaratine for AML and MDS respectively, our dose confirmation trial of 2101 in APL, as well as our 5609 trial in pancreatic cancer, will allow us to provide benefit to patients and maximize value for our company and our shareholders. We look forward to executing on our near-term value drivers and continuing to work towards achieving our mission of making a profound difference in patients' lives. I will now turn the call over to Jason to review our financial results.

Thank you, Nancy. Based on our current plans, we believe we have sufficient capital to fund our planned operating expenses and capital needs into the second quarter of 2023. Now I'll turn to our financial results. we recognized $5.5 million in revenue in the first quarter of 2022, consisting of $5.1 million from the collaboration with GBT and $400,000 from our collaboration with Insight. In the first quarter of 2021, we recognized a total of $4.8 million in revenues under our collaborations with GBT and Insight. R&D expenses were $25.2 million in the first quarter of 2022, as compared to $20 million for the first quarter of 2021. This increase was primarily due to the advancement of our clinical and preclinical programs and increases in employee-related expenses due to headcount growth. G&A expenses were $6.9 million in the first quarter of 2022 as compared to $5.7 million for the first quarter of 2021. This increase was primarily due to increases in employee-related expenses and an increase in patent prosecution costs and consulting fees. Finally, we reported a net loss for the first quarter of $25.1 million, or 40 cents per share, compared to a net loss of $14.2 million, or 23 cents per share, for the same period in 2021. With that, I will turn the call over to the operator for questions.

If you'd like to ask a question at this time, please press the star, then the number one key on your touchtone telephone. To withdraw your question, press the pound key. Our first question comes from Ted Tentoff with Piper Sandler.

Ted, good morning, and thank you for the update. I was wondering, I'm looking forward to multiple data readouts this year. I'm wondering when it comes to 5609 data, Are there potential strategic alternatives that you guys are considering, or is this a drug that you remain committed to developing yourself? Thanks.

Hey, Ted. Thanks for the question. We are, you know, incredibly excited about, you know, all of the programs that we have. And, you know, we're going to be making, you know, data-driven strategic decisions as we turn over some of these data cards. And, you know, as always, we're thinking about a variety of different opportunities to make sure that we have the necessary capital and approaches to moving these programs forward. So I would just say, you know, these are sort of data-driven sort of strategic decisions on how we'll progress everything.

Excellent. Well, looking forward to lots of data this year.

Great. Thanks, Ted. Our next question comes from Ava Privatera with Cowan.

Hi, good morning. Thanks for taking our questions. So for the safety lead-in data from the SelectAML trial, can you maybe give a little bit more detail on what we can expect to see in terms of clinical activity? Will there be a breakdown of CR, CRI, CRH, MLFS? Is that something we can expect to see?

Great. I'm going to have David Roth answer that question.

Sure. So yeah, the select AML trial, just to remind everybody who's listening in, is in newly diagnosed unfit AML patients. And we're evaluating the combination of tamibaratine with venetoclax and azacitidine. And the intent is to move this into a randomized trial to compare that triplet versus the Veneza doublet in those patients. So we're very excited about this opportunity, in particular because 30% of patients we know who would get the standard Veneza don't respond or when they respond often will lose their response. And we do think there's an opportunity to improve upon that by supplementing RARA-positive patients with Tamivarantine. So our trial will start with a safety lead-in. And then it will move into that randomized portion in the future. And what we're looking for, obviously, is safety and tolerability. And then we'll see responses in those patients who've enrolled. So we'll have that. And we'll certainly, you know, the primary endpoint, as you asked the question, is the composite complete response rate. And that consists of the CR plus the CRI rate and the proportion of patients who have that. But, of course, we'll be breaking that down into the CRs and the CRIs. And we'll also be looking at other measures of efficacy. So just to remind you, you know, we've had a very high degree of transfusion independence in our prior studies. So we'll certainly be looking at that, the time to response, and all sorts of parameters, molecular features of the patients and so on. So we're very excited about this data and looking forward to sharing that with you in the second half of the year.

Perfect. That's really helpful. And just to follow up, can you discuss your expectations for the efficacy of the then-Aza doublet in this population of RARPAR's positive patients who tend to have, as you've described previously, the monocytic phenotype? Sure. How should we be thinking about the bar for efficacy here?

So, yes, it's a very important question. And When we're thinking about it, and you're making reference to the data we presented at ASH 2020, where we showed that an emerging pattern of features in patients with AML who don't respond to venetoclax involves having what we refer to as monocytic features. It doesn't necessarily mean they're monocytes per se, but they have molecular characteristics of monocytes. And we were able to show that patients who are RARA positive, a high percentage of those patients indeed have these features, which is what led us to, you know, speculate that RARA positive patients may not only have increased sensitivity to response to TAMI, but possibly a lower response to the standard of care, which in this case would include venetoclax. So, you know, you know that the doublet, the TAMI-AZA doublet, as well as the then-AZA doublet, Each has a composite CR rate in the low 60% range. And so, you know, we're anticipating, you know, if that holds up in our randomized portion of the trial. When we test RARA positive patients with Veneza, they would have a response rate less than that. And, you know, we're looking, hopefully, for a response rate that's somewhere north of that, you know, low 60% range range. in our own triplet. So that just sort of gives you a sense. We haven't specified an actual number, but we need to see the data to know.

That's very helpful. Thank you.

Our next question comes from Jason Butler with JMP Securities.

Hi. Thanks for taking the questions. Just a quick follow-up on the 5609 triple combo data. Can you just remind us what the, you know, average follow-up or duration of follow-up we would see from the safety lead-in period or, you know, when we see this data cut later this year?

David? Yeah, so, you know, we're going to be, you know, presenting data on, you know, the enrolled patients for the safety lead-in of the combination with chemotherapy, right? And... We're obviously following all the patients through their time on study. We haven't specifically said the exact number of patients or how long the follow-up would be, but we generally present all the data that's available to us to help you understand, as we understand it, how the combination is emerging. Now, just to remind you, again, just to make sure everyone is familiar enough with the trial design, we had presented at ESMO single-agent data which showed very clinically important activity in pancreatic cancer patients. We had nearly a 40% stable disease rate in the pancreatic patients who had enrolled, and those were heavily pretreated patients. So for a single agent, that's a pretty significant observation, and that was the general consensus of our clinical investigators who were helping us interpret this data as well. And not only did we have a relatively high stable disease rate but we also saw very objective evidence of clinical activity. Tumors were shrinking. CA-19-9 tumor biomarkers were plummeting in many of those patients who had serial measures. And so we really have confidence that this is a good place to pursue and really inform our thinking. And that was in many ways also supported by preclinical data. And you may remember some of our posters where we showed high degree of 56 and 9 activity in tumor models with KRAS mutations. And I'll just remind you that KRAS is a very common mutation in pancreatic cancer. And we've also, you know, seen evidence of chemotherapy combination synergy, in particular with gemcitabine, which is the backbone of our development strategy in this case. So we're advancing a doublet in combination with gemcitabine and a triplet in combination with gemcitabine. and abraxane, which is nabpaclitaxel. And we're doing that. In the doublet, the patients will either be in first or second relapse, so that would be second or third line patients, provided they've had fulferinox prior to study enrollment. And the triplet will be purely in second line patients who have progressed following a fulferinox treatment. And that will really nicely set the stage for us to understand the combination activity, the contribution of each of the drugs to that activity. So we'll be looking at things like, obviously, safety and tolerability, but we'll also be looking at response rates, duration of response. And the amount of data we have is certainly going to be dependent on how much we can collect and pull together in time for the second half of the year. So we'll look forward to sharing all that with you.

Great. I appreciate the details there. I'm looking forward to the readouts later this year. Thanks.

Thanks, Jason. Our next question comes from Mark Breidenbach with Oppenheimer.

Hey, good morning, guys. Thanks for taking the questions. Probably both of these are directed toward Nancy. I guess I'm wondering, as we get closer to 2023, And if we're still in a situation where there are financial limitations on clinical bandwidth, I'm wondering how you would most likely prioritize the distribution of capital between the three main ongoing trials in MDS, AML, and pancreatic cancer. So that's one question. And then the other one is just since we're getting pretty close to the dose confirmation readout for 2101, I just wanted confirmation that there was no data-driven reason to hold off on the phase three study and that this decision is being purely driven as a result of financial considerations. Thanks for taking the questions.

Great. Thanks, Mark. We are very committed to Tammy Baratine in our phase three trial and higher risk MDS. And we've, you know, reiterated our guidance of having, you know, data from that trial the end of 2023, early 2024. I think with, so I'll just state that. With 5609 and the AML study, we're going to be turning over some data cards later this year. And as always, we'll make sort of data-driven decisions around kind of how we want to allocate capital. We'll be very thoughtful about that. I will just, in relationship to 2101, our decision to seek additional capital is in no way due to lack of confidence in the potential 2101. We think this is a really great opportunity for patients. We believe it will change the standard of care and make a big difference. And our decision is strictly due to the current market conditions. We want to make sure that we have the capital necessary to move it into Phase III before we commit. And we look forward to progressing the program once we have secured the appropriate resources.

Okay, fair enough. Thanks for the clarity on that, and thanks for taking the questions.

Our next question comes from Zegbe Jal with Roth Capital Partners.

Good morning. Thanks for taking my questions and thanks for the detailed updates. So it seems like you have three data readouts coming out in the second half of the year or mid to second half of the year. And so I just had a couple of quick questions. The first one is for the Select EML study. Simply a follow-up to a question posed earlier. I wanted to get a sense of how de-risking you think this data set will be for kind of, you know, defining the next go-forward strategy.

Hey, Zegba. I think as David mentioned to you, we're going to be looking not only at the safety but the clinical activity from the safety lead-in. And, you know, as David said, you know, we know kind of the general clinical activity rate for the two doublets, TAMI-AZA and VEN-AZA, and we're going to want to be seeing activity that's sort of north of what we see with either doublet as sort of part of our rationale to move forward into the next phase. So I think it is going to be de-risking in the sense of that activity will help drive what's the next best steps and will, you know, give the potential for a data that would support this being an important, you know, triplet combination. And, you know, we know the patients in AML, frontline unfit, continue to have a very large unmet medical need. And so we think there's room, definitely room to move to demonstrate a higher activity with that triplet combination. Does that help, Stegma?

Yeah, that was helpful. And the next one here is just about 56% I was just wondering if you do see some compelling data in pancreatic cancer patients, are you likely to move this into a much larger study? And the only reason I'm asking is because of the capital constraints that you kind of mentioned. So I'm just wondering, you know, are you all capitalized enough to kind of move this forward?

Yeah, thanks, Zegba. You know, I think similar to kind of what I've said overall, we're going to have data from the safety lead-in portion of that trial at the end of the year. And again, based on what that data look like, we'll make decisions about moving into the next phase, which is sort of the expansion phase, where we've enrolled, I think, approximately 25 patients in each of the either doublet or triplet or one or the other, or if the data don't support it, we wouldn't move it forward. And I think we'll, you know, use the readouts of those studies to, you know, enable us to think about what's the best way to move them forward.

Thanks. And then the last one here, again, just about the capital position. Just kind of trying to get a sense of, you know, what's driving the spend right now. Is it largely the phase three MDS job? Because one looks at your cash balance relatively quickly. Some of your peers, you're just like, oh, you're in a pretty decent position. But with the noted reprioritization, I was just wondering, is it because of the large Phase 3 MDS study? And then also trying to get a sense of how you're thinking about your options for raising additional capital so we can kind of perhaps think about how to model some of these changes. For example, when might the next 2101 study begin based on, you know, how you think you're going to be able to secure additional capital? Thanks again.

Yeah, I'll take that. Zegber, we're clearly spending the majority of our capital on the Phase 3 MDS trial. That's the most advanced program, and as Nancy said, we're very focused on making sure that we've got the right resources and capitalization to support that data readout, you know, kind of end of 23, early 24. And then in terms of capital, I'm not going to specifically comment on our financing strategy but like many other companies in our space we're very proactive in exploring all the options available to Cirrus to make sure that we have the right amount of capital to continue to resource the company going forward and as we said before we have capital into the second quarter of 23 and we like to try to have capital obviously beyond that so we are continuing to look at various options to raise incremental capital and make sure we're properly resourced to, you know, manage all the clinical programs we have going forward.

Thanks, Jason. I was hoping to kind of tease out of you plans for some BD with all of these de-risked data sets coming up. But, yeah, thanks again for the opportunity.

But what I will say implied in my answer, Zegba, is that we are looking at you know, various options. And I think it's fair to say we're being very proactive about different opportunities to raise capital at the lowest cost possible to optimize our capital structure. So I think it's fair to say we're looking at a variety of things right now.

Understood. And although I asked you about the reprioritizations, I mean, I think a lot of companies are going to have to go through this process, you know, given market conditions. And I think it's It's nice that you guys are, you know, far-thinking and kind of doing that right now, especially as we have a little study ongoing. So, again, thanks again for the update.

Thanks, Sigma.

As a reminder, if you'd like to ask a question at this time, that is star, then 1. Our next question comes from Matthew Cross with Alliance Global Partners.

Hi, all. Good morning, and thanks for taking a couple of questions from me. Following up on some of the familiar themes here, I guess as we're looking towards some of those data-driven decisions in the second half, specific to AML, was curious just to get the kind of latest update on your assumptions based on interaction with the FDA. For the regulatory path there, I guess once we have the safety lead-in data, just wanted to know kind of what your options might look like as far as proceeding into a full phase three, some kind of phase two B, along a sort of accelerated approval path, given the focus on our positivity. I just wanted to get the latest thinking there in terms of what next options could look like based on that data later in the year. And then I have one follow-up after that.

Great, Matt. I'm going to have David answer that.

Sure. So, you know, we are embarking on a fairly robust randomized Phase II study that we would believe would give us very, you know, good quality data to compare the triplet versus the doublet. And so, you know, the nature of that data will really be what informs the best strategy to move forward. We know the Food and Drug Administration has awarded approvals to drugs in the AML space based on single-arm data using the complete response rate and durability of response. But, you know, the opportunity to have randomized data, you know, may also be an option. And then, of course, there are considerations for what's required to get global approvals, both in the United States and Europe, where randomized data may be, you know, the preferred development strategy. So let's just say we're looking forward to generating the data in the second half related to the safety lead-in and moving forward and we'll keep you informed about next steps as our data evolve.

Fair enough. No, I appreciate the insight, as I know, right? It's kind of an ongoing question in the heme space about the FDA tightening some of the reins around these accelerated approvals based on randomized data or other parameters. The second one was just kind of a capital question related to – Any additional context you could give us for maybe the scale generally of capital required for the 2101 Phase 3 that led to the assumption to pause on that for a bit, maybe compared to the MDS trial or framing against any potential cost savings from choosing not to pursue 5609 further in heme malignancies. Just wanted to get kind of a sense of the offset from that against what that Phase 3 could have looked like. Thanks.

Sure, Matt. It's Jason again. I don't want to comment on the specific clinical trial costs, but I think it's fair to say, you know, phase three in APL is, you know, is significant relative to some of our other potential expenditures on trials. So we do want to make sure, as Nancy said, that we have the right capital allocated to start the trial so we don't have any capital constraints going forward once we do start the trial and we're confident that we'll be able to find that capital at the right time. So in terms of the APL, we're going to continue to explore the different alternatives and hopefully have the right capital to start that trial because we're very excited about the program. In terms of some of the reprioritizations we announced this morning, it allows us to have capital into kind of the second quarter of 23, and we're going to continue to evaluate you know, the market backdrop and our potential sources of capital to continue to make sure we always have capital available to us, you know, particularly as we head into, you know, kind of the end of 23, early 24 trial results for MGS.

Understood. Okay. Thanks. Looking forward to the data in the second half of the year and getting some more answers on some of these questions. Appreciate it.

Thanks, Matt. That concludes today's question and answer session. I'd like to turn the call back to Nancy Simonian for closing remarks.

Thank you, operator. Thank you, everyone, for joining us today and for your continued support of Cirrus. We look forward to updating you again soon as we advance our portfolio and work to build Cirrus into a leading biopharmaceutical company. Please reach out to us if you have any questions and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.