Good morning, and welcome to Syros Pharmaceuticals' Second Quarter 2020 Financial Results Conference Call. [Operator Instructions] This call is being webcast live on the Investors 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 now like to turn the call over to Naomi Aoki, Vice President of Corporate Communications and Investor Relations at Syros. .

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pleased with our second 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; Dr.

David Roth, our Chief Medical Officer; and Joe Ferra, our Chief Financial. We will then open the call for questions. 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 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 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 we 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. .

Thanks, Naomi. Good morning, everyone, and thank you for joining us today as we review our progress over the second quarter of 2020. Despite all the unforeseen challenges that this year has brought, Syros is entering the second half of 2020 from a position of strength.

Our team has shown remarkable resiliency, dedication and creativity in recent months, continuing to advance our 2 clinical stage programs, SY-1425 and SY-5609, towards multiple key data readouts this year and next while also progressing our earlier-stage research..

The coming months promise to be an exciting time for the company. Importantly, we remain on track for clinical readouts for 1425 in 2 RARA-positive AML patient populations and for the first clinical data from the Phase I trial of 5609 in select solid tumor patients, all in the fourth quarter.

These data will provide valuable insights that will help inform next steps and hopefully bring us closer to our vision of building an enduring company with medicines that provide a profound benefit for patients..

Turning now to our second quarter accomplishments.

Consistent with our philosophy to explore combinations early in the clinic that have a mechanistic rationale and strong preclinical data, in June, we initiated enrollment in a cohort evaluating escalating doses of 5609 in combination with fulvestrant in treatment-resistant HR-positive breast cancer patients..

Also in the second quarter, as part of the virtual ASCO meeting, we presented new preclinical data for 5609, our highly selective oral CDK7 inhibitor, in colorectal cancer.

As David will describe later in the call, these data, together with a mechanistic rationale, formed the basis for our decision to include colorectal cancer patients in our ongoing Phase I trial and support the PD markers we are using to guide dose selection in the trial.

Since the inception of the company, we have been leaders in selective CDK7 inhibition and the preclinical data in colorectal cancer and PD markers build on that leadership, further highlighting 5609 as a potentially transformative targeted approach for difficult-to-treat cancers..

In addition to advancing our clinical stage programs, we also continue to progress our preclinical and discovery efforts. As you know, building a robust and sustainable pipeline through ongoing investment in our gene control platform is a key strategic priority for us.

On our first quarter call, we reported that we had reduced our lab-based operations as a result of the pandemic. I am pleased to share today that with the appropriate safety measures in place, our lab-based operations are now fully functional to drive forward our preclinical and discovery research..

Even if the reality in which we are operating has been so dramatically altered by the ongoing pandemic, our focus here at Syros is unchanged. We are proud of the work our team has done to continue to advance our research and to prevent potential disruptions for the patients in our clinical trials.

And we are deeply appreciative of the partnerships of our clinical trial sites and investigators..

Every day matters for patients with cancer and monogenic diseases and we are committed to executing with excellence to bring medicines to market that make a profound difference for these patients..

With that, I'd like to turn the call over to David. .

Thank you, Nancy, and good morning to everyone joining us today. To echo Nancy's sentiment, the second half of 2020 promises to be an exciting time for Syros as we share additional clinical data and begin charting next steps for 1425 and 5609.

In anticipation of the data readouts in the fourth quarter, I want to provide a brief overview of both programs including the nature of the data we expect to present and how we think about the opportunities in AML and in advanced solid tumors..

Let me begin with 1425. We believe 1425 has broad combination potential for the approximately 30% of AML and higher-risk MDS patients who are RARA-positive. Our ongoing Phase II trial is focused on 1425 in combination with azacitidine in this genomically defined subset of newly diagnosed unfit and relapsed or refractory AML patients.

Data to date from the newly diagnosed unfit cohort has shown high rates of complete responses and transfusion independence with rapid onset of action, favorable tolerability and early signs of durability..

We completed enrollment of newly diagnosed unfit patients in November, and we expect to report mature data in the fourth quarter which will include more patients and longer duration on study. These data will inform next steps in the frontline setting..

Despite treatment advances, we're still not curing these patients. Better frontline treatment regimens are needed. Some patients are refractory to frontline therapies and virtually all patients, in some cases, with the resistance mechanisms that appear to confer an even poorer prognosis.

All of this points to the ongoing need for active, well-tolerated therapies that can be used in combination as well as the importance of identifying which patients are likely to respond to which therapies and how best to sequence those therapies..

We completed enrollment in the relapsed or refractory patient cohort in May, and we expect to report the first data from this cohort in the fourth quarter. The unmet need in relapsed or refractory AML is particularly stark.

Median overall survival remains low at less than 6 months, and recently approved therapies target limited patient subsets, leaving many patients with few alternatives..

Given the severity of the unmet need in the relapsed/refractory setting, we believe that the data later this year have the potential to provide proof-of-concept in this patient population, enabling a decision about moving into a registrational trial..

Turning now to 5609. As Nancy mentioned, we presented data as part of the virtual ASCO meeting that provided the first insights into the role of 5609 in colorectal cancer and form the basis for our decision to include colorectal cancer patients in the ongoing Phase I trial.

We decided to explore 5609 in colorectal cancer because increased expression of oncogenic transcription factors as well as activating mutations in the Map kinase pathway through KRAS or BRAF, which are potent activators of cell cycle progression, are common disease drivers.

By inhibiting CDK7, 5609 attacks both of these processes, providing a mechanistic rationale for 5609 in colorectal cancer..

The hypothesis played out in our preclinical studies, 5609 inhibited tumor growth at well-tolerated doses in colorectal cancer models with tumor regressions seen in both BRAF-mutant and very difficult-to-treat KRAS-mutant models..

Our preclinical studies in colorectal cancer also supported the PD markers that we're using in the ongoing trial and, with our collective work in this area, have been able to correlate PD markers with target occupancy and preclinical efficacy.

We are measuring these markers in patients to help understand the doses that are needed for biologic activity..

At ASCO, we also provided additional detail on the Phase I trial design. As you know, we dosed the first patient in the trial in January. This multicenter open-label trial is expected to enroll approximately 60 patients with advanced breast, colorectal, lung or ovarian cancer or with solid tumors of any histology that harbor RB pathway alterations.

We're focusing on these patient populations based on our preclinical data, a mechanistic rationale and the unmet need. This includes the recently initiated cohort to assess 5609 in combination with fulvestrant..

In preclinical models of HR-positive CDK4/6 inhibitor-resistant breast cancer, 5609 in combination with fulvestrant shows robust antitumor activity. Additionally, across our preclinical studies in breast, lung and ovarian cancer, we've observed deeper and more sustained responses to 5609 in models with RB alteration than in non-RB altered models.

And notably, RB alteration have emerged as a resistance mechanism to CDK4/6 inhibitors..

The Phase I study is designed to assess the safety and tolerability of escalating doses of 5609 with the goal of establishing a maximum tolerated dose and schedule. Additional objectives include assessments of antitumor activity, PK, PD and potential predictive biomarkers.

We plan to report initial safety, tolerability, PK and PD data in the fourth quarter of this year. We expect to report additional dose escalation data, including clinical activity data in mid-2021.

And as part of the trial design, we have the flexibility to expand cohorts at any dose level that has cleared the dose-limiting toxicity evaluation to explore early signals while dose escalation proceeds.

Once dose escalation is completed, we plan to initiate multiple expansion cohorts to further evaluate the safety and efficacy of 5609 as both a single and combination agent..

We have 2 excellent product candidates in 1425 and 5609, reflecting our deep understanding of how genes are controlled and our ability to systematically analyze regulatory regions to hone in on which genes to control in which patients to maximize the chances of providing a therapeutic benefit.

We look forward to reporting data for both programs that we hope will bring us closer to our goal of bringing much needed new medicines to market for patients..

With that, I'll pass the call over to Joe to review our financial results for the second quarter. .

Thank you, David. We ended the second quarter in a strong financial position with $108.7 million in cash, cash equivalents and marketable securities compared to $91.4 million on December 31, 2019.

Based on our current plans, we believe we have sufficient cash to fund our operating expenses and capital requirements into 2022, beyond multiple expected data readouts for 1425 and 5609, while also continuing to invest in our preclinical programs and in discovery..

We recognized $3.2 million of revenue in the second quarter of 2020 as compared to $0.5 million in the second quarter of 2019. This $3.2 million consisted of $2.5 million under our collaboration with GBT and $0.7 million under our collaboration with Incyte.

All revenues recognized in the second quarter of 2019 were under our collaboration with Incyte..

R&D expenses were $14.8 million in the second quarter of 2020 compared to $15.5 million for the same period in 2019. This decrease was primarily due to deprioritizing SY-1365. G&A expenses were $5.1 million in the second quarter of 2020 compared to $5.2 million for the same period in 2019..

Finally, we reported a net loss for the second quarter of $17.2 million or $0.38 per share compared to a net loss of $19.5 million or $0.47 per share for the same period in 2019..

With that, I will turn the call over to the operator for questions. Thank you. .

[Operator Instructions] Our first question comes from Phil Nadeau with Cowen and Company. .

First question just generally on the ongoing studies.

Are you seeing any impact from COVID on the trials whether it's the ability of patients to get drug or get interim evaluations at the clinical trial sites?.

Phil, we have not seen any major disruptions with the trials. I think having an oral cancer drug in a relapsed or high unmet medical need oncology populations, it really has not been affected.

We instituted measures, telemedicine, remote monitoring and other things like that, but we have not seen any major impact on our ability to enroll or follow the patients in the trial, which is great. And again, it's a great testament to our team at Syros for all that work as well as think the enthusiasm of the investigators on our programs. .

That's great. Second, maybe a question 1425.

In the relapsed/refractory population, can you give us some sense of what you would consider proof-of-concept, what quality of data would encourage you to continue developing 1425 in that population?.

No, Phil, as you know, there's a very high unmet medical need in that patient population. Once people relapse, certainly a median overall survival of less than 6 months, and I think even with some of the newer therapies coming into the frontline setting, the patients are becoming even more refractory.

You just look at precedence in terms of the regulatory approvals, there have been agents approved in the relapsed setting with response rates between 20% and 35% with duration of response between 4 and 6 months. So that's at least a regulatory benchmark and precedents for approvals in that setting.

And I think it just denotes the very high unmet medical need in that population and the real need for new therapies there. .

That's great.

Then last question on 5609, have you disclosed how many cohorts have been dosed thus far in the dose escalation study? And have you seen any evidence of the headache, nausea and vomiting from 1365 or thus far do those events seem to be molecule specific to 1365?.

As you heard from David, we started enrollment in January. We're planning to report the initial data from the dose escalation in the fourth quarter. And we haven't given any further details in terms of number of patients enrolled other than that the trial is enrolling kind of well.

And at this point, we have not communicated anything about the data from that cohort. So that's what to expect in the fourth quarter -- or from the trial, sorry. .

Our next question comes from Ted Tenthoff with Piper Sandler. .

Just maybe picking up on 5609, what would be viewed as sufficient to proceed in different indications from the readout in 4Q? Do you guys have specific bars? Or are you just looking for general activity?.

Ted, so the goal of a dose escalation study, like the one that we have is really to establish a dosing schedule to take forward into the expansion arm, so the focus is really on safety, tolerability, PK and PD. .

As you know, David and the team have done a great job designing a trial that gives us also flexibility to do what we call sort of an extension arms and -- that we can focus on particular patient population at particular doses. But I think I would just focus on the main focus for the dose escalation portion is on the safety, PK and PD.

We learned a lot from working in CDK7 inhibition for a long time in terms of good markers to assess biologic activity. We're taking the learnings from our first-generation program as well as what we've learned with 5609 and incorporating that so that we can identify sort of biologically active doses.

And we've learned also about potential patient populations that we think are most likely to respond, and we're enriching for those. .

Our next question comes from Jason Butler with JMP Securities. .

First one, just for the newly diagnosed data that we're going to see for 1425 later this year. Obviously, you've already shown some compelling response rate data in the RARA population.

But can you maybe talk about how you think about the bar to success or threshold that you need to see in terms of durability? And then just secondly, looking forward, obviously, you're also going to wait for the relapsed/refractory data.

But in the newly diagnosed population, do you think there's still a strategy to focus on a combination with aza alone? Or do you think that anything going forward would need to include venetoclax as well?.

Thanks for the question, Jason. I'm going to take the second question, and I'll start first and then turn it over to David on the bar on the durability. As you know, the landscape has been changing in AML. And it's great for patients. There's many more options available.

Obviously, the ven-aza approval, and most recently, the Phase III data, I think, are really solidifying that as a very important standard of care in the frontline setting and unfit patient population. .

I think we also know that about 1/3 of the patients don't respond to ven-aza. We know that even those patients that respond, which is great and they benefit, they -- we could do better there.

And so when you think a little bit about the strategy that one could take going forward, you think about -- and you just think about how drug development is done, like just harking back to the myeloma days, when we had active drugs as a single or a doublet, then we would look for triplets.

And so a one-off opportunity was to add on to a standard-of-care like ven-aza. Think about where there may be resistance to ven-aza that you could consider developing and then other related conditions to AML, where maybe ven-aza is not yet the standard of care. So all of those are opportunities to think about in the upfront setting.

I would just say that there continues to be a very important unmet medical need in that space. And I think what's really great about 1425 is not only is it active, it works quickly. It gives deep and durable responses. It's also very well tolerated.

And I think that's really important when you think about a combination agent that you want to be able to add on and not get overlapping toxicity. .

So that's the -- that's just the overview on kind of how we think about this continued important need and for active new agents. .

I'm going to ask David to address the question on kind of the -- what are we thinking about for the bar for the durability for -- in the newly diagnosed study. .

Yes, sure. So it's really important to appreciate that we will be evaluating the totality of the data that we have as we consider next steps. And durability certainly is a very important component of the overall picture. But it's really just one piece of the puzzle.

And we also will be considering the percentage of patients who have responses, the depth of the responses which are often associated with long-lasting responses and also the safety and tolerability, that's obviously very key..

So when we look at it, we'll probably be looking at that in the context of a relevant historical benchmark, which would be single agent azacitidine. I mean that's the backbone used in our combination. And we know very well that, that has a median duration of response of about 10 months. And so that would certainly be a context in which to interpret.

And then just not to repeat what Nancy just said, but really the broad opportunity in the emerging landscape, given what we're seeing evolve, it really speaks volumes to the importance of having well-tolerated combinations that we can deploy in a targeted way where we expect patients to respond based on selection and things of that nature.

So that's the overall context that we'll be interpreting the data. .

Our next question comes from Mark Breidenbach with Oppenheimer. .

Just a few for me and kind of all focused on 5609, probably aimed toward David.

First of all, based on the preclinical models with 5609, I'm wondering if you can make any extrapolations regarding what steady state exposure levels you'll have to achieve before potentially seeing clinical activity?.

Sure. So we've obviously developed the 5609 and have moved into Phase I testing starting this past January, and we're very excited about that and the progress we're making. But when we look back at the preclinical models, we've obviously done a range of tests in various models of different tumor types.

We've measured drug exposures in blood, and we've correlated those exposures with very important pharmacodynamic markers, PD markers that are going to help us understand the biological activity that we're getting and correlating that to exposure.

But more importantly, we've looked at those correlations and sort of pinned them into the types of tumor regressions one might see. And so those are very important PK/PD efficacy relationships that are helping to inform our dosing decisions as we go through the escalation. .

Obviously, we're going to need to measure the drug levels in humans to directly connect the dots between the preclinical models and the humans. And that's really going to be main focus of our presentation in the fourth quarter where we're going to have initial data that's going to focus on the safety, tolerability and the PK and the PD.

So we look forward to giving you more updates on that type of information at that time. .

Okay. Fair enough.

And I'm wondering if the preclinical activity you saw in the Map kinase pathway mutants in your CRC models, do you think that's unique to CRC? Or would you expect activity in those types of mutants across other solid tumor types?.

So that's a really good question. So we -- you're referring to the data that we presented back in May at virtual ASCO, yes. And in that system, just so everyone knows specifically what you're asking, we did demonstrate fairly significant preclinical activity in colorectal cancer models.

And what was notable about that presentation was the abundance of tumor growth inhibition. We had 2/3 of our models.

We have 30 PDX models, 2/3 of them demonstrated tumor growth inhibition and 1/4 of them had complete regressions with a very significant number about, I think, half of the BRAF mutant models and certainly some of the KRAS mutant models also demonstrating regression. So it was really exciting to see that. .

Now we know that at times, certain pathways may have a tumor-specific context in which they demonstrate the activity, but we also know these are common mutations that are relevant in other tumor types. And so I think they're -- really, those represent a broad opportunity for the drug in a range of solid tumor cancers. .

Okay. Fantastic. And last one for me, just because I know fulvestrant is maybe increasingly used in combination with a CDK4/6 inhibitor. Now that you're running a combination study with 5609 and fulvestrant, I'm wondering if that's open to patients who have had prior fulvestrant.

Or if those are being specifically excluded?.

Yes. So really, the main inclusion criteria for that, and that's a combination that we've already added into the dose escalation to help explore the tolerability and, ultimately, the clinical activity of that combination requires having progressed after a CDK4/6 inhibitor.

And it's understood that patients may have had a range of different hormonal agents in combination. But they probably would not have -- previously had fulvestrant. .

[Operator Instructions] Our next question comes from Zegbeh Jallah with ROTH Capital Partners. .

So just a couple of clarifications for me. I thought the benchmarks for AML were helpful.

And if you were to assume that you exceeded those levels, would you move forward with both the newly diagnosed and the relapse/refractory patient studies in parallel? Or would you just be moving forward with the relapsed/refractory AML cohort?.

And then just a quick question here as well for 5609. Again, as you know, I'm quite bullish about CDK7. But just wanted, again, a clarification with regards to what we may see later this year relative to what we might see next year in terms of data and how you're thinking about the expansion, assuming that you do -- or extension arms.

Assuming that you do see, again, positive data in that, would you just start with colorectal or how you're thinking with -- about moving forward with that or with the breast cancer or something like that?.

Zegbeh, nice to hear from you. So with the answer to the 1425 question, we're going to let the data kind of drive our decisions in the context of the strength of the data, the competitive landscape. And also, I don't -- wouldn't -- if the data are strong in both populations, we will move forward with both.

If it's in one, it would be with one or the other. So it really relates to what the data are. It's not that we would necessarily only seek one or the other. .

I think -- we believe that there is a high unmet medical need in both patient populations, and it will be a data-driven decision. And it's probably a similar answer to the next question is -- obviously, we've enriched the population in the Phase I on tumor types that we think are most likely to respond, where there's high unmet medical need.

And again, I think we're going to let the data drive the decisions as well as the development path in terms of what we take forward into the expansions. .

And I think as we've said, the data to expect in the fourth quarter of this year is really focused around PK/PD, the tolerability. As David mentioned, we developed PD markers that give us -- have a good sense of sort of where there's biologically active doses. We correlated that with preclinical efficacy. So that's really the focus of the Q4.

And then mid next year, the more robust dose escalation data, including clinical activity. .

Really appreciate it. And just a quick clarification.

I feel like the data we saw was really supportive that this molecule is a lot more potent than your last molecule, which is encouraging, but is there anything else that we should be looking for in terms of seeing that this is really a differentiated molecule?.

Well, as you know, we -- when we profiled 5609 against 1365, it is obviously one is covalent, the other one -- 5609 is not covalent. But it's -- 5609 was more potent and more selective.

And in preclinical models where we ran it head-to-head against 1365, it showed superior activity and also worked more consistently at doses below the maximum-tolerated dose. So I think the preclinical data supports the superiority of 5609 over 1365. .

And we were excited -- with 1365, we not only learned a lot, but we saw evidence of biologic and clinical activity, so that gave us a lot of confidence in CDK7 inhibition as an important therapeutic approach, and we think we have the optimal molecule of 5609. .

I'm not showing any further questions at this time. I would now like to turn the call back over to Nancy Simonian for any further remarks. .

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 updating you as we continue to advance our vision of building a fully-integrated biopharmaceutical company with a portfolio of medicines that provide a profound benefit for people with cancer and monogenic diseases. Stay well. .

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect..