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Infinity Reports Second Quarter 2012 Financial Results

Infinity Pharmaceuticals, Inc. (NASDAQ: INFI) today highlighted its recent clinical and business progress and reported its financial results for the second quarter of 2012.

“Our business has evolved substantially this year. We’ve made strong progress with IPI-145, our potent PI3K-delta and -gamma inhibitor, presenting preclinical data, expanding our Phase 1 trial in patients with advanced hematologic malignancies and initiating a Phase 2a trial in asthma,” stated Adelene Q. Perkins, president and chief executive officer at Infinity. “We also regained the global rights to our PI3K franchise and early discovery programs, giving us worldwide control of our entire product portfolio. Moving forward, we believe we are well positioned to select the optimal mix of financing and new strategic alliances to advance our portfolio of novel drug candidates.”

Recent Pipeline Highlights

  • Phase 2a development of IPI-145 in inflammation initiated: Infinity today announced that it has initiated a Phase 2a, randomized, double-blind, placebo-controlled trial of IPI-145, a potent, oral inhibitor of PI3K-delta and -gamma, in approximately 30 patients with mild, allergic asthma. Endpoints of this multi-dose, two-way crossover study include safety, pharmacokinetics and FEV 1, a standard measure of lung function.Infinity is also planning to initiate a Phase 2a, randomized, placebo-controlled, global study of IPI-145 in patients with rheumatoid arthritis. This signal-finding trial is designed to evaluate the safety and activity of multiple doses of IPI-145 in approximately 150 patients. Infinity expects the trial to begin in the fourth quarter of 2012.
  • Phase 1 trial of IPI-145 in patients with advanced hematologic malignancies expanded:In July, the company expanded its Phase 1, open-label, dose-escalation trial of IPI-145 in patients with advanced hematologic malignancies. This expansion cohort is designed to evaluate the safety, pharmacokinetics and efficacy of IPI-145 administered at 25 mg twice daily (BID) in patients with chronic lymphocytic leukemia, indolent non-Hodgkin’s lymphoma or mantle cell lymphoma. There have been confirmed investigator assessments of clinical response at the lowest dose levels, including 15 mg BID and less. To date, IPI-145 has been generally well tolerated and dose escalation remains ongoing to determine the maximum tolerated dose.Additional expansion cohorts are planned once the maximum tolerated dose of IPI-145 is determined. Infinity announced today that the malignancies that may be evaluated in these cohort expansions include T-cell lymphomas, diffuse large B-cell lymphoma, acute lymphocytic leukemia and myeloproliferative neoplasms. Infinity expects to present data from this trial at a medical meeting in the second half of 2012.
  • Topline results from Phase 1 study of IPI- 145 in healthy volunteers reported: In June, Infinity reported topline data from its Phase 1, randomized, double-blind, placebo-controlled trial in healthy adult subjects. In the study, IPI-145 was well tolerated, with no clinically significant changes in clinical laboratory values or vital signs. In addition, an ex vivo pharmacodynamic assay demonstrated rapid, dose dependent, and durable inhibition of basophil activation at all dose levels. Infinity expects to present additional details from this Phase 1 study at a medical meeting in the second half of 2012.
  • Preclinical data for IPI-145 presented: In June, Infinity presented preclinical data demonstrating that IPI-145 exhibits potent PI3K-delta and -gamma inhibition in biochemical, cellular and whole blood assays and activity in multiple preclinical models of inflammatory diseases, including rheumatoid arthritis and asthma.
  • Update on Phase 2 trial of retaspimycin HCl in NSCLC provided: In July, Infinity reported that the Phase 2, double-blind, randomized, placebo-controlled trial of retaspimycin hydrochloride (HCl) in non-small cell lung cancer (NSCLC) patients with a history of smoking is enrolling ahead of schedule. Infinity now anticipates completing enrollment in this trial this fall and expects to report data from the trial in the first half of 2013. Retaspimycin HCl is an intravenously administered, potent and selective heat shock protein 90 (Hsp90) inhibitor.

Recent Business Highlights

  • Global rights to PI3K, FAAH and early discovery programs regained: In July, Infinity restructured its strategic alliance with Mundipharma International Corporation Limited and Purdue Pharmaceutical Products L.P. by mutual agreement. Under the restructured agreements, Infinity reacquired all worldwide development and commercialization rights for its PI3K, FAAH and early discovery programs, and Mundipharma will no longer provide research and development funding to Infinity. Mundipharma and Purdue are entitled to receive royalties on net product sales for programs previously included in the strategic alliance, at rates ranging from one to four percent. Infinity has agreed to issue and sell to Purdue Pharma L.P. (PPLP) 1,896,552 shares of its common stock, at a price of $14.50 per share, for aggregate proceeds to Infinity of $27.5 million. Infinity has also agreed to issue 3,520,013 shares of Infinity common stock, at the same price per share, to repay the principal and accrued interest outstanding under the $50 million line of credit made available by PPLP. The closing of the equity purchases is subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction of other customary closing conditions. In addition, PPLP and its associated entities have agreed to vote any shares held by them in accordance with the voting recommendations put forth by Infinity’s Board of Directors for a period of five years following the closing of the equity purchase, subject to certain exceptions with respect to votes on major corporate transactions and charter amendments but only for shares held by the associated entities prior to entry into the July 2012 stock purchase agreement or acquired on the open market. Further, Mundipharma’s Board observation rights have terminated.
  • Executive vice president, chief financial officer and chief business officer appointed: In July, Lawrence Bloch, M.D., J.D., joined Infinity as executive vice president, chief financial officer and chief business officer. In this role, Dr. Bloch is responsible for the company’s corporate strategy and financial operations. Dr. Bloch brings more than a dozen years of experience in strategic finance and corporate development in the biopharmaceutical industry.

Second Quarter 2012 Financial Results

  • At June 30, 2012, Infinity had total cash, cash equivalents and available-for-sale securities of $104.6 million, compared to $104.9 million at March 31, 2012.
  • Total revenue for the second quarter of 2012 was $21.9 million, compared to $20.0 million for the same period in 2011. In the second quarter of 2012, revenue was composed of $20.9 million for reimbursed research and development (R&D) services and $1.0 million from the amortization of deferred revenue associated with the grant of rights and licenses under Infinity’s strategic alliance with Purdue and Mundipharma, compared to $19.0 million and $1.0 million, respectively, for the same period in 2011.
  • R&D expense for the second quarter of 2012 was $28.5 million, compared to $25.0 million for the same period in 2011. The increase in R&D expense for the second quarter of 2012 compared to the same period in 2011 was related primarily to the continued clinical development of retaspimycin HCl and IPI-145, in addition to restructuring expenses related to the decision to discontinue company-sponsored development of saridegib in late June.
  • General and administrative (G&A) expense for the second quarter of 2012 was $7.7 million, compared to $6.3 million for the same period in 2011. The increase in G&A expense for the second quarter of 2012 compared to the same period in 2011 was related primarily to higher new product planning and consulting expenses as well as increased business support for the company’s advancing R&D programs.
  • Net loss for the second quarter of 2012 was $14.7 million, or a basic and diluted loss per common share of $0.54, compared to $11.7 million, or a basic and diluted loss per common share of $0.44, for the same period in 2011.

2012 Financial Guidance

Infinity today provided updated financial guidance for 2012. These updates follow its decision to terminate company-sponsored development of saridegib and the restructuring of the strategic alliance agreements with Mundipharma and Purdue. As a result, the company has implemented cost-cutting measures, including a reduction in headcount of approximately 20 percent. The company now expects to incur an estimated $2.5 million in restructuring charges during 2012, of which $1.4 million in employee-related costs was recorded in the second quarter. Infinity expects to realize cost savings from this restructuring beginning in 2013.

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