8-K
false 0001571498 0001571498 2020-11-06 2020-11-06

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):

November 6, 2020

 

 

EPIZYME, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   001-35945   26-1349956

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

400 Technology Square,

Cambridge, Massachusetts

  02139
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (617) 229-5872

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

symbol

 

Name of each exchange

on which registered

Common stock, $0.0001 par value   EPZM   Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02

Results of Operations and Financial Condition

On November 6, 2020, Epizyme, Inc., a Delaware corporation (the “Company”) announced its financial results for the quarter ended September 30, 2020. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information provided under Item 2.02 of this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits

(d) Exhibits

 

99.1    Press release issued by the Company on November 6, 2020*
104    Cover Page Interactive Date File (embedded within Inline XBRL document)

 

*

The exhibit shall be deemed to be furnished, and not filed.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    EPIZYME, INC.
Date: November 6, 2020     By:  

/s/ Robert B. Bazemore

      Robert B. Bazemore
      President and Chief Executive Officer
EX-99.1

Exhibit 99.1

 

LOGO

Epizyme Reports Business Progress and Third Quarter 2020 Financial Results

Company Reports 55% Growth in Net Revenues of TAZVERIK® Compared with 2Q 2020

Expansion of Loan Facility with Pharmakon Advisors; $150 Million Drawn Down to Fund Important Growth Initiatives and Extend Operating Runway into At Least 2023

On-Track to Initiate Efficacy Portions of Confirmatory Trials in ES and FL and Phase 2 Castration-Resistant Prostate Cancer Trial in Early 2021

Conference Call to be Held Today, November 6 at 8:00 a.m. ET

CAMBRIDGE, Mass., Nov. 6, 2020Epizyme, (Nasdaq: EPZM), a fully integrated, commercial-stage biopharmaceutical company developing and delivering novel epigenetic therapies, today provided business and portfolio updates and reported third quarter 2020 financial results.

“2020 has been a year of big milestones for Epizyme, and we are executing our TAZVERIK® launches well, given the unprecedented challenges presented by the COVID-19 pandemic on FL patients’ access to their physicians and on access to our customers,” said Robert Bazemore, president and chief executive officer of Epizyme. “While we acknowledge the impact the COVID-19 dynamics have had on the initial uptake in FL, we are reaching both the ES and FL patient populations expected based on our label, and our view of the value proposition of TAZVERIK is unchanged. We believe that the combination of our commercial and clinical performance, and strong balance sheet, sets us up for a positive future.”

TAZVERIK® (tazemetostat) Program Updates

 

   

Execution of TAZVERIK U.S. Commercialization in Relapsed or Refractory Follicular Lymphoma (FL) and Epithelioid Sarcoma (ES): TAZVERIK generated net product revenue in both ES and FL of $3.4 million in the third quarter, with growth over the second quarter of 2020 of 55% largely driven by the U.S. Food and Drug Administration (FDA) approval of TAZVERIK in FL on June 18, 2020. During the third quarter, the COVID-19 pandemic continued to negatively impact FL patient visits to physicians, new patient starts across all lines of treatment, as well as the ability of Epizyme’s field-based teams to fully access FL prescribers. Epizyme reports that new prescriptions for TAZVERIK in FL have increased month over month and are being written for both EZH2 mutation and wild-type patients; in the academic and community settings; and across multiple treatment lines in relapsed or refractory patients. In addition, payor coverage for ES and FL has been in-line with the TAZVERIK label. Epizyme continues to adapt its commercial strategy to the COVID-19 pandemic to support increased adoption of TAZVERIK in appropriate patients.

 

   

Two Lancet Oncology Publications on TAZVERIK Phase 2 Data in ES and FL: In October 2020, The Lancet Oncology published results of the company’s Phase 2 trial cohorts evaluating TAZVERIK for the treatment of ES and relapsed or refractory FL, which supported the accelerated approvals by the FDA for both indications in 2020.


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Confirmatory Trials for ES and FL On-Track: Enrollment in the safety run-in portions of Epizyme’s two confirmatory trials of TAZVERIK is on track to be completed in 2020, followed by initiation of the efficacy portions in early 2021. The ES confirmatory trial is evaluating TAZVERIK in combination with doxorubicin compared with doxorubicin plus placebo as a front-line treatment for ES, and the FL confirmatory trial is evaluating TAZVERIK in combination with “R2” (Revlimid® plus Rituxan®) compared with R2 plus placebo in the second-line treatment setting in patients with FL.

Tazemetostat Expansion Program Updates

 

   

Advancing to Efficacy Portion of Combination Trial in Metastatic Castration-Resistant Prostate Cancer (mCRPC): Epizyme completed enrollment in the safety run-in portion of its combination study in mCRPC, and initiation of the efficacy expansion stage is planned for early 2021. Epizyme anticipates reporting safety and efficacy data from the safety run-in portion of the study at a medical meeting in 2021.

Upcoming Presentations at ASH

 

   

Data in FL to be Presented at 62nd American Society of Hematology (ASH) Annual Meeting and Exposition: Epizyme will present data from its FL development program during multiple poster sessions at ASH, which will be held virtually December 5-8, 2020:

 

   

Title: Tazemetostat is Associated with Lower Risk for Safety Outcomes Versus the PI3-Kinases Idelalisib, Duvelisib and Copanlisib, in Patients with Relapsed/Refractory Follicular Lymphoma Who Have Received at Least 2 Prior Systemic Treatments: a Matching-Adjusted Indirect Comparison of Single-Arm Trials

 

   

Session Name: 623. Mantle Cell, Follicular, and Other Indolent B-Cell Lymphoma—Clinical Studies: Poster II

 

   

Date: Sunday, December 6, 2020

 

   

Title: A Phase 1b/3 Randomized, Double-Blind, 3-Stage Study of Tazemetostat or Placebo Plus Lenalidomide and Rituximab in Patients with Relapsed/Refractory Follicular Lymphoma

 

   

Session Name: 623. Mantle Cell, Follicular, and Other Indolent B-Cell Lymphoma—Clinical Studies: Poster II

 

   

Date: Sunday, December 6, 2020

 

   

Title: Analyzing Efficacy Outcomes from the Phase 2 Study of Single-Agent Tazemetostat as Third-Line Therapy in Patients with Relapsed or Refractory Follicular Lymphoma to Identify Predictors of Response

 

   

Session Name: 623. Mantle Cell, Follicular, and Other Indolent B-Cell Lymphoma-Clinical Studies: Poster II

 

   

Date: Sunday, December 6, 2020

 

   

Title: A Phase 2, Open-Label, Multicenter Study of Tazemetostat in Combination with Rituximab for the Treatment of Relapsed or Refractory Follicular Lymphoma

 

   

Session Name: 623. Mantle Cell, Follicular, and Other Indolent B-Cell Lymphoma-Clinical Studies: Poster III

 

   

Date: Monday, December 7, 2020


LOGO

 

Leadership Update

 

   

Organization Strengthened with Strategic Promotions: In October 2020, Matthew Ros was promoted to executive vice president and chief strategy and business officer of Epizyme and Vicki Vakiener was promoted to chief commercial officer. As part of these promotions, Mr. Ros is overseeing execution of Epizyme’s long-term corporate strategy. Ms. Vakiener is overseeing commercial execution of TAZVERIK in ES and FL.

Third Quarter 2020 Financial Results

 

   

Cash Position: Cash, cash equivalents and marketable securities were $279.9 million as of September 30, 2020, as compared to $322.1 million as of June 30, 2020.

 

   

Revenue: Total revenue for the third quarter of 2020 was $3.6 million, comprised of $3.4 million in net sales of TAZVERIK in the U.S. and $0.1 million in collaboration revenue, compared to $2.5 million in the second quarter of 2020, comprised of $2.2 million in net sales of TAZVERIK in the U.S. and $0.2 million in collaboration revenue.

 

   

Cost of sales: Cost of sales were $1.6 million for the third quarter of 2020, which reflects the costs of TAZVERIK units sold, amortization of intangible assets and third-party royalties on net product revenue.

 

   

Operating Expenses: Total GAAP operating expenses were $57.9 million for the third quarter of 2020, compared to $60.0 million for the second quarter of 2020. Total non-GAAP adjusted operating expenses were $50.2 million for the third quarter of 2020, compared to $50.9 million for the second quarter of 2020.

 

   

R&D expenses: GAAP R&D expenses were $25.7 million for the third quarter of 2020, compared to $26.4 million for the second quarter of 2020. Non-GAAP adjusted R&D expenses were $23.5 million for the third quarter of 2020, compared to $23.4 million for the second quarter of 2020.

 

   

SG&A expenses: GAAP SG&A expenses were $30.6 million for the third quarter of 2020, compared to $32.7 million for the second quarter of 2020. Non-GAAP adjusted SG&A expenses were $26.2 million for the third quarter of 2020, compared to $27.1 million for the second quarter of 2020.

 

   

Net Loss (GAAP): Net loss attributable to common stockholders was $56.1 million, or $0.55 per share, for the third quarter of 2020, compared to $58.5 million, or $0.58 per share, for the second quarter of 2020.

Updated Financial Guidance

 

   

Agreement with Pharmakon Advisors to Expand Loan Facility Extends Operating Runway: Epizyme and Pharmakon Advisors, an affiliate of Royalty Pharma, have expanded their original loan agreement established in November 2019, enabling Epizyme to draw down an additional $150 million from the loan facility, subject to customary closing conditions. Based on its current plans and projections, Epizyme believes that its existing cash, cash equivalents and marketable securities combined with the proceeds from the loan facility will fund the company’s operations into at least 2023.


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Updated 2020 Operating Expenses: Epizyme updated its guidance for full year non-GAAP adjusted cash operating expenses to between $215 million to $235 million, from the previous $235 million to $255 million. The change is due primarily to a reduction in travel and other expenses and a change in how the company’s manufacturing expenses are recorded with a commercial product, partially offset by an increase in commercial-related expenses to address COVID-19 related challenges. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is presented in the table attached to this press release.

Conference Call Information Epizyme will host a conference call today, November 6, at 8:00 a.m. ET. To participate in the conference call, please dial (877) 844-6886 (domestic) or (970) 315-0315 (international) and refer to conference ID 9556565. A webcast will be available in the investor section of the company’s website at www.epizyme.com, and will be archived for 60 days following the call.

About Non-GAAP Financial Measures

In addition to financial information prepared in accordance with the U.S. generally accepted accounting principles (GAAP), this press release includes the following non-GAAP financial measures: total non-GAAP adjusted operating expenses on a historical and projected basis, non-GAAP R&D expenses on a historical basis and non-GAAP SG&A expenses on a historical basis. Epizyme derives these non-GAAP financial measures by excluding certain expenses and other items from the respective GAAP financial measure, that is most directly comparable to each non-GAAP financial measure. Specifically, the non-GAAP financial measures exclude stock-based compensation expense, amortization or depreciation of intangibles and milestone payments related to TAZVERIK that are payable under the company’s collaboration agreement with Eisai Pharmaceuticals. The company’s management believes that these non-GAAP financial measures are useful to both management and investors in analyzing its ongoing business and operating performance. Management does not intend the presentation of these non-GAAP financial measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP, but as a complement to provide greater transparency. In addition, these non-GAAP financial measures may differ from similarly named measures used by other companies. A quantitative reconciliation of projected non-GAAP adjusted operating expenses to total operating expenses is not available without unreasonable effort primarily due to the company’s inability to predict with reasonable certainty the amount of future stock-based compensation expense.

About TAZVERIK

TAZVERIK is a methyltransferase inhibitor indicated for the treatment of:

 

   

Adults and pediatric patients aged 16 years and older with metastatic or locally advanced epithelioid sarcoma not eligible for complete resection.

 

   

Adult patients with relapsed or refractory follicular lymphoma whose tumors are positive for an EZH2 mutation as detected by an FDA-approved test and who have received at least two prior systemic therapies.

 

   

Adult patients with relapsed or refractory follicular lymphoma who have no satisfactory alternative treatment options.

These indications are approved under accelerated approval based on overall response rate and duration of response. Continued approval for these indications may be contingent upon verification and description of clinical benefit in a confirmatory trial(s).


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The most common (³20%) adverse reactions in patients with epithelioid sarcoma are pain, fatigue, nausea, decreased appetite, vomiting and constipation. The most common (³20%) adverse reactions in patients with follicular lymphoma are fatigue, upper respiratory tract infection, musculoskeletal pain, nausea and abdominal pain.

View the U.S. Full Prescribing Information here: Epizyme.com

About Epizyme, Inc.

Epizyme, Inc. is a fully integrated, commercial-stage biopharmaceutical company committed to its mission of rewriting treatment for cancer and other serious diseases through novel epigenetic medicines. In addition to an active research and discovery pipeline, Epizyme has one U.S. FDA approved product, TAZVERIK® (tazemetostat), for the treatment of adults and pediatric patients aged 16 years and older with metastatic or locally advanced epithelioid sarcoma (ES) who are not eligible for complete resection; adult patients with relapsed or refractory follicular lymphoma (FL) whose tumors are positive for an EZH2 mutation as detected by an FDA-approved test and who have received at least two prior systemic therapies; and adult patients with relapsed or refractory follicular lymphoma who have no satisfactory alternative treatment options. These indications are approved under accelerated approval based on overall response rate and duration of response. Continued approval for these indications may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). The company is also exploring the treatment potential of tazemetostat in investigational clinical trials in other solid tumors and hematological malignancies, as a monotherapy and combination therapy in both relapsed and front-line disease settings. By focusing on the genetic drivers of disease, Epizyme seeks to match medicines with the patients who need them. For more information, visit www.epizyme.com.

About Pharmakon Advisors

Pharmakon Advisors, LP is the investment manager of the BioPharma Credit funds and of BioPharma Credit PLC (LON:BPCR), the only listed specialist investor in debt from the life sciences industry. Established in 2009, Pharmakon has invested $5 billion across 40 different financing transactions for companies in the life sciences.

Cautionary Note on Forward-Looking Statements

Any statements in this press release about future expectations, plans and prospects for Epizyme, Inc. and other statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: whether the commercial launch of TAZVERIK for epithelioid sarcoma and follicular lymphoma in the approved indications will be successfully executed; whether tazemetostat will receive marketing approval for epithelioid sarcoma or follicular lymphoma in other jurisdictions, full approval in the United States or approval in any other indication; whether results from preclinical studies or earlier clinical studies will be predictive of the results of future trials, such as the ongoing confirmatory trials; whether results from clinical studies will warrant meetings with regulatory authorities, submissions for regulatory approval or review by governmental authorities under the accelerated approval process; expectations for regulatory approvals, including accelerated approval, to conduct trials or to market products; the


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impact of the COVID-19 pandemic on the company’s business, results of operations and financial condition; whether the conditions to the additional draw-down under the company’s loan facility are satisfied and the draw-down is consummated; whether the company’s cash resources will be sufficient to fund the company’s foreseeable and unforeseeable operating expenses and capital expenditure requirements; other matters that could affect the availability or commercial success of tazemetostat or the company’s therapeutic candidates; and other factors discussed in the “Risk Factors” section of the company’s most recent Form 10-Q filed with the SEC and in the company’s other filings from time to time with the SEC. In addition, the forward-looking statements included in this press release represent the company’s views as of the date hereof and should not be relied upon as representing the company’s views as of any date subsequent to the date hereof. The company anticipates that subsequent events and developments will cause the company’s views to change. However, while the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so.

TAZVERIK® is a registered trademark of Epizyme, Inc.

Contacts

Media:

Erin Graves, Epizyme, Inc.

Media@epizyme.com

(617) 500-0615

Investors:

Alicia Davis, THRUST Strategic Communications

alicia@thrustsc.com

(910) 620-3302


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EPIZYME, INC

CONSOLIDATED BALANCE SHEET DATA (UNAUDITED)

(Amounts in thousands)

 

     September 30,
2020
     December 31,
2019
 
Consolidated Balance Sheet Data:      

Cash and cash equivalents

   $ 93,422      $ 139,482  

Marketable securities

     186,485        241,605  

Intangible, net

     48,041        —    

Total assets

     381,756        424,589  

Total current liabilities

     34,780        34,386  

Deferred revenue

     3,812        3,806  

Long-term debt, net of debt discount

     68,554        23,309  

Liability related to sale of future royalties

     13,701        12,793  

Total stockholders’ equity

     244,409        331,137  

EPlZYME, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Amounts in thousands except per share data)

 

     Three Months Ended
September 30
     Nine Months Ended
September 30
 
   2020      2019      2020      2019  

Revenues

           

Product revenue, net

   $ 3,445      $ —        $ 6,963      $ —    

Collaboration revenue

     121        5,715        424        19,506  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenue

     3,566        5,715        7,387        19,506  
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses

           

Cost of product revenue

     1,608        —          3,244        —    

Research and development

     25,738        26,579        77,253        94,362  

Selling, general and administrative

     30,575        17,089        90,161        44,773  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     57,921        43,668        170,658        139,155  
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating loss

     (54,355      (37,953      (163,271      (119,649

Other income, net:

           

Interest (expense) income, net

     (1,364      1,879        (1,177      5,790  

Other expense, not

     (42      (15      (105      (34

Non-cash interest expense related to sale of future royalties

     (312      —          (908      —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Other (expense) income, net:

     (1,718      1,864        (2,190      5,756  
  

 

 

    

 

 

    

 

 

    

 

 

 

Loss before income taxes

     (56,073      (36,089      (165,461      (113,893

Income provision

     —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Net loss

   $ (56,073    $ (36,089    $ (165,461    $ (113,893
  

 

 

    

 

 

    

 

 

    

 

 

 

Reconciliation of net loss to net loss attributable to common stockholders

           

Net loss

   $ (50,073    $ (36,089    $ (165,461    $ (113,693

Accretion of convertible preferred stock

     —          —          —          (2,940
  

 

 

    

 

 

    

 

 

    

 

 

 

Net loss attributable to common stockholders

   $ (56,073    $ (36,089    $ (165,461    $ (116,633
  

 

 

    

 

 

    

 

 

    

 

 

 

Net loss per share attributable to common stockholders - basic and diluted

   $ (0.55    $ (0.40    $ (1.64    $ (1.33

Weighted-average common shares outstanding used in net loss per share attributable to common stockholders - basic and diluted

     101,512        91,044        100,747        86,145  


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EPIZYME, INC.

Reconciliation of Selected GAAP Measures to Non-GAAP Measures (UNAUDITED)

(Amounts in thousands)

 

     Three Months Ended
September 30
    Nine Months Ended
September 30
 
   2020     2019     2020     2019  

Reconciliation of GAAP to Non-GAAP Cost of Product Revenue

        

GAAP Cost of Product Revenue

   $ 1,608     $ —       $ 3,244     $ —    

Less: Depreciation and Amortization

     (1,038     —         (1,959     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Cost of Product Revenue

   $ 570     $ —       $ 1,285     $ —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP to Non-GAAP Research and Development

        

GAAP Research and Development

   $ 25,738     $ 26,579     $ 77,253     $ 94,382  

Less: Stock-Based Compensation Expenses

     (2,079     (1,104     (7,045     (4,001

Less: Depreciation and Amortization

     (142     (148     (410     (463

Less: Eisai R&D Milestone Expense

     —         —         —         (10,000
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Research and Development

   $ 23,517     $ 25 327     $ 69,798     $ 79,918  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP to Non-GAAP Selling, General and Administrative:

        

GAAP Selling, General and Administrative

   $ 30,575     $ 17,089     $ 90,161     $ 44,773  

Less: Stock-Based Compensation Expenses

     (4,307     (2,573     (14,143     (7,615

Less: Depreciation and Amortization

     (112     (62     (305     (163
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Selling, General and Administrative

   $ 26,156     $ 14,454     $ 75,713     $ 36,995  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP to Non-GAAP Operating Expenses

        

GAAP Operating Expenses

   $ 57,921     $ 43,668     $ 170,658     $ 139,155  

Less: Stock-Based Compensation Expenses

     (6,386     (3,677     (21,188     (11,616

Less: Depreciation and Amortization

     (1,292     (210     (2,674     (626

Less: Eisai R&D Milestone Expense

     —         —         —         (10,000
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Operating Expenses

   $ 50,243     $ 39,781     $ 146,796     $ 116,913