Good day, ladies and gentlemen, and welcome to the Syndax second quarter 2018 conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will have a question-and-answer session and instructions will be given at that time. [Operator Instructions]. It is now my pleasure to turn the conference over to Melissa Forst with Argot Partners. Please go ahead.

Thank you, operator. Welcome and thank you to those of you joining us on the line and the webcast this afternoon for a review of Syndax's second quarter financial and operating results. I'm Melissa Forst with Argot Partners. And with me this afternoon to discuss the results and provide an uptake on the company's progress are Dr. Briggs Morrison, Chief Executive Officer, and Rick Shay, Chief Financial Officer. Also joining us on the call today for a question-and-answer session is Michael Metzger, President and Chief Operating Officer and Peter Ordentlich, Chief Scientific Officer. This call is being accompanied by a slide deck that has been posted to the company's website, so I'd ask you to please turn to our forward-looking statements on slide two. Before we begin, I would like to remind you that any statements made during this call that is not historical is considered to be a forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors including those discussed in the Risk Factors section of the company's most recent quarterly report on Form 10-Q as well as other reports filed with the SEC. Any forward-looking statements represent our views as of today, August 7, 2018, only. And a replay of this call will be available on the company's website at syndax.com following the call. And with that, please turn to slide three, and I'm pleased to turn the call over to Dr. Briggs Morrison, Chief Executive Officer.

Thank you very much, Melissa, and thank to everyone for joining us on today's call and webcast. This afternoon, I will share the progress we've made during the second quarter as we continue to execute on our corporate strategy in support of our primary mission – to realize a future in which people with cancer live longer and better than ever before. Slide three provides a summary of the investment highlights for Syndax. During this call, I will discuss both the progress we're making with our lead program entinostat as well as provide some commentary on the clinical development strategy for SNDX-6352, our anti-CSF-1R antibody. I'll review the plans for the upcoming progression-free survival, or PFS, readout from our Phase III entinostat hormone receptor positive breast cancer trial for which received a breakthrough therapy designation from the FDA and I'll review the upcoming milestones related to our exciting ENCORE clinical trial program, which combines entinostat with PD-1 antagonist. Slide four provides a summary of the milestones that we communicated on our last call back in May of 2018. As you can see, we have a lot of definitive clinical data reading out over the next period, a potentially transformative time for our company. Let me now turn to slide five and give you an update on our Phase III trial of entinostat in hormone receptor positive, HER2 negative breast cancer. Slide five summarizes the trial design and the endpoints of the trial. It will also summarize the key upcoming milestones. As we have communicated previously, in the fourth quarter of last year, the ECOG Data Safety Monitoring Committee completed the final progression-free survival analysis and the first interim overall survival analysis of this trial. And these analyses are held confidentially by the ECOG-ACRIN study statistician and the Data Safety Monitoring…

Thank you, Briggs. Turning to slide 13, for the three months ended June 30, 2018, Syndax reported a net loss attributable to common stockholders of $18.4 million or $0.74 per share compared to $13.6 million or $0.70 per share for the prior-year quarter. Second quarter research and development expenses increased to $14.9 million from $9.9 million for the prior-year. The increases were primarily due to increased activities in CMC manufacturing for SNDX-6352, increased development activities for the Menin program and increased clinical costs for the entinostat ENCORE 602 program, partly offset by completion of entinostat pharmacology trials and lower program cost for E2112. Employee compensation also increased due to increased headcount. G&A expenses totaled $4.5 million for the second quarter of 2018 compared to $4.3 million for the prior-year. The increase was primarily due to increased entinostat pre-commercialization activities and increased patent-related legal expenses. As of June 30, 2018, there were 22.7 million common shares issued and outstanding, a 2 million share reduction from the 24.7 million shares outstanding at the end of Q1. In June 2018, the company signed an exchange agreement with Biotechnology Value Fund, under which BVF exchanged 2 million shares of common stock for 2 million warrants to purchase common shares. This was not a sale of common stock by BVF, but an exchange of stock for warrants. On a fully diluted basis, we had 24.8 million shares outstanding at June 30, including 22.7 million common shares, the 2 million warrants held by BVF and 45,000 shares from in-the-money stock options using the treasury method. For purposes of calculating the company's earnings per share, the warrants are included in the weighted average number of shares used to compute the net loss per share. So, the warrants will not impact the calculation of EPS going forward. Syndax ended the second quarter with cash balance of $98.4 million, which we believe is sufficient to fund development for at least 12 months, enabling us to reach key development milestones. Subsequent to June 30, in the third quarter of 2018, through August 6, pursuant to our ATM financing facility, the company has sold 633,000 shares of common stock with net proceeds of $4.4 million. Additional financial details will be available in our 10-Q which we intend to file this week. Looking ahead, we expect R&D expenses to be $14 million to $16 million for the third quarter and $59 million to $62 million for the full-year 2018. Total operating expenses are expected to be $18 million to $20 million for Q3 and $77 million to $81 million for 2018. And those total operating expense numbers include approximately $1.5 million of non-cash stock compensation costs per quarter. The cash burn in the third quarter of 2018 will be offset by the $4.4 million in net proceeds from stock sales using the ATM facility. I'll now turn the call back over to Briggs.

Great. Thanks a lot, Rick. So, looking ahead, we anticipate several key upcoming milestones summarized on slide 14. As I've noted, we anticipate definitive clinical data readouts and investment decisions on six indications in the coming months. The readout of the PFS results from our Phase III in hormone receptor positive, HER2 negative breast cancer in the E2112 trial as well as the next overall survival analysis in November of this year, as well as data from our ENCORE program in non-small cell lung cancer, melanoma, colorectal cancer, triple negative breast cancer and ovarian cancer. As I said earlier, it's an absolutely thrilling time to be at Syndax. I think it's almost unprecedented for a company of our size to have so much data coming out over such a short period. Phase III trial and five Phase II trials over a matter of months. It will be an extremely busy next few months for us here at Syndax. As always, I'd like to thank the team here at Syndax, our collaborators and, most importantly, the patients, the trial sites and the investigators involved with our clinical programs. With that, I'd like to open the call for questions.

Thank you. [Operator Instructions]. Our first question comes from the line of Chris Shibutani of Cowen. Your line is open.

Great, thank you very much. Appreciate the updates. Maybe for Rick, the operating expense guidance for the balance of this year, some reduced levels of operating expenditure as well as R&D. Can you give us a sense for where you're perhaps borrowing from and does this represent and delay or push out into 2019 or how should we think about following into 2019 now that we also have sort of data readouts that you're talking about in the first half of next year?

Yeah. Thanks for the question, Chris. Our earlier guidance anticipated that we would be commencing at least one follow-on clinical study to our ENCORE 601 program. And we weren't exactly sure which indication, but we felt that sometime in the second half of 2018 we would be starting a follow-on study. Since we're continuing to evaluate that data and letting it mature, it's unlikely that we'll be starting one of those studies prior to year-end. So, that's pushing any of those costs out into 2019.

Great. And then, the new news. As far as your pipeline development, you mentioned an efficient way to explore looking at CSF-1R in chronic graft-versus-host. When we think about, broadly speaking, antibodies to CSF-1R, sort of some of the on-target as well as perhaps related off-target related AEs, the issue that that approach has had – particularly looking at either benign tumors in the orthopedic area or in cancer have included things such as periorbital edema, liver function test issues. Can you comment about what it is that you perhaps learned from preclinical work or pre-IND work about dosing that you think might make it amenable to probably the relatively complicated environment of patients in the setting that they would be vulnerable to graft-versus-host?

Thanks, Chris. I'll have Michael Meyers, our Chief Medical Officer, take that question.

Chris, great question. So, what we've seen is that the periorbital edema and specifically the liver function abnormalities don't become an issue until what would be considered to be higher, more frequent dosing. And we believe that the GVHD indication may allow us to see efficacy at significantly lower doses than would need to be achieved to treat solid tumors.

Great, thank you. I'll get back into the queue.

Thank you. Our next question comes from Konstantinos Aprilakis of JMP Securities. Your line is open.

Good afternoon. And thanks for taking my questions. A follow-up to Chris', if I may. So, your thoughts on the competitive landscape in GVHD and sort of how did that inform your decision to pursue this as a potential indication. You've got number of assets in active clinical development, late-stage trials. Imbruvica was recently approved. Where do you see 6352 potentially fitting in?

So, I'll have Mike Metzger take that question.

Thanks, Konstantinos. So, really good question. I think there's a lot of opportunity, second, third line in chronic GVHD. I think you're probably aware of the BTK, Imbruvica has been approved as the first, second line agent after steroid use in the first line. So, that being the only one that's sort of approved. Other agents are used. They've been tested, but small patient numbers. Nothing has really distinguished itself in the second or third line necessarily other than the BTK inhibitor. So, I think what distinguishes or potentially distinguishes us is a safety profile that hasn't been seen with the other competitive agents that are being developed. Naturally, you have to achieve an efficacy bar that's insignificant, but if you can show a safety profile and a tolerability profile, that's advantageous. I think you have a shot at good market share in second and third line.

And just for the sake of clarification, you're not deprioritizing the oncology indications? This is just an add-on to that?

That's actually correct. So, as you know, we have the combo work going on with durvalumab. As I said in my prepared remarks, I think because of the competitive nature, the other things that we want to do, we'll talk about as they are about to start rather than too far ahead. So, this is not in any way deprioritizing other work we would do in solid tumors or in combination with cell therapy or other things that we have thought about. It's really, we think, a potentially fast-to-market way to get good safety and efficacy data from single agent antibody.

Got it. thanks very much, guys.

Thank you. Our next question comes from Christopher Marai of Nomura Instinet. Your line is open.

Hey, thanks for taking the question. And congrats on the progress. Another one on the CSF-1R, I was just wondering – thinking about chronic GVHD and some of the manifestations, obviously, skin is one of them, is that an opportunity perhaps to get a quick read on the efficacy of this drug and then how do you look at sort of endpoint and taking it forward? Do we look at specific manifestations? Lungs, skins specifically? Just because macrophages tend to be maybe more old in that aspect of the disease or will you look at more of a traditional approach to development in GVHD? And then I have a follow-up.

So, I'll let Michael Meyers take that one.

So, Chris, we will be looking at the specific pan chronic GVHD scoring system to determine symptom improvement. We will also be looking, obviously, for biologic correlatives in specifically accessible areas such as skin. So, I think the key is that we'll be looking at something that clearly is evidence of clinical benefit, which we expect that we should be able to see at the doses that we can achieve without significant toxicity and will also be looking at multiple biologic correlatives to determine a relationship between PD and clinical benefit – PD being pharmacodynamic benefit.

Got it. And then, just with respect to your collaboration with AZ and perhaps the opportunity to go to other autoimmune diseases or rarer indications with this asset, maybe remind us of the collaboration and how do you look at, I suppose, driving this forward? Is this going to be, generally speaking, an oncology asset in your eyes or do you look to develop it more broadly? Obviously, you currently have an oncology focus. So, I would love to try and understand that. And that's it. Thank you.

Yeah, Chris. It's Michael. I'll take the question. So, in terms of our partnership with AZ, so I think I'll remind you that it's a clinical collaboration that we've signed with AZ and it's non-exclusive. And we, obviously, have global rights from UCB. I think the idea here is that we can develop a compound in addition to what we're doing with AZ and that means, in any indication, whether it's oncology or non-oncology, and so we've chosen this indication carefully for the reasons Briggs outlined in his remarks. But it does not preclude us from going into other oncology indications which we plan to do potentially with AZ and with others. We have some ideas and things that we'll hopefully put in place in the future. So, I think we have fortunately put the type of partnership in place that gives us great flexibility, avails us to PD-1 antagonist and allows us to do that combination in cancer, but doesn't tie us down to one particular option as we develop in multiple indications.

Yeah. Chris, the only thing, I guess, I would add is we are not precluded from developing the drug in other non-oncologic indications should we decide that those provide attractive opportunities [indiscernible] doesn't, in a way, detract from what we're doing in oncology, but it maybe add to it.

Thanks. Very helpful. Thank you.

Thank you. Our next question comes from Robert Hazlett of BTIG. Your line is open.

Yes, thank you for taking the question. Regarding 601 and the non-small cell lung cancer effort, could you describe your level of confidence with the biomarker approach you're pulling there and maybe actually across indications as well? The data has matured and I'd love to get a sense of how that's – your confidence is evolving one way or another.

As I said, there'll be an updated presentation at the World Lung. I think it's in Toronto end of September. Looking at the data that's going to be presented there, I think it's generally consistent with what we presented ASCO. So, it seems to be maturing in a consistent way. So, I don't think our confidence has changed anything from when we presented data at ASCO.

Perfect. And then, secondly, could you remind us about 602 and 603 now that they are fully enrolled? Is there an ability for an accelerated pathway using the results of those studies, assuming they're positive? Thanks.

That's a very good question. I'd say we don't know the answer to that. We'd rather wait and see what the data shows and then potentially have discussions. As you can imagine, neither one of the partner antibodies is yet approved for the indication in which we're studying it. So, you'd have the case of having two unapproved agents. You would clearly have – if the trials are positive – evidence that entinostat adds to the comparator agent. So, there could be a conversation with regulators, but I think we tend to think of it more as a path to a subsequent registration trial.

Okay, terrific. Thank you.

Thank you. Our next comes from Madhu Kumar of B. Riley FBR. Your line is open.

Well, thank you. This is [indiscernible] sitting in for Madhu. Two quick questions. First, has there been any change in the rate of recruitment for E2112 or has it continued at the previous pace? And then, second, a little more involved, can you please walk through the preclinical and mechanistic rationale for CFS-1R inhibition in chronic graft-versus-host disease?

So, I'll let Michael take the question – Michael Myers – on the enrollment and then I'll have Peter Ordentlich talk about the preclinical rationale.

So, actually, over the past three months, enrollment in 2112 has increased by about 40% relative to what the enrollment rate was for the prior three to six month period, and therefore we are very confident that we will complete enrollment this quarter.

And, Peter, you want to make a few comments on the preclinical rationale for CSF-1R.

Yeah, sure. Basically, preclinical models of chronic graft-versus-host disease, one looked at skin involvement as well as lung involvement, were used to determine the role of the donor-derived macrophage in generation of the sort of fibrotic effects of GVHD. And in those experiments, it was shown that those macrophage are both donor-derived and CSF-1 dependent for their growth and proliferation and infiltration into both those disease sites. And so, a CSF-1R antibody was very effective in blocking both the inhibition and prevention of the symptoms of chronic graft-versus-host disease in both of those models. So, that's really the main preclinical data that we based our moving ahead with the clinical trial on.

All right. Thank you very much.

Thank you. Our next question comes from David Lebowitz of Morgan Stanley. Your line is open.

Hello. Thank you for taking my question. Could you just give us a refresher for the hormone receptor positive trial, of what type of PFS would be expected in the control population? And then, similarly, what type of OS might be considered given that there is another analysis coming up?

Right. I'll let Michael Meyers summarize the design characteristics and what the assumptions were.

Yeah. So, we were looking for about a three-month increase in PFS between the treatment arm and the control arm, which equated to a hazard ratio of about 0.58. The minimal hazard ratio – or the maximal hazard ratio required for statistical significance would be a hazard ratio of 0.67, which would equate to about a two-month improvement. We believe that somewhere between the two to three-month improvement, specifically with a trend to overall survival benefit would be considered to be clinically meaningful in this specific patient population.

And for OS, what type of assumptions also? Would they be similar?

The assumptions for PFS were actually a bit more aggressive than the assumptions for OS. So, the hazard ratio that we're trying to achieve for OS was a hazard ratio of 0.73 with a hazard ratio of about 0.8 being required for statistical significance. And that equates to about a five-month improvement in overall survival from approximately 22 months for the control arm to about 27 months for the treatment arm.

Thank you for that.

And as you recall, the overall survival delta in the 301 study was actually in excess of eight months.

Thank you for that. And one more question, on the ENCORE 601 for melanoma, could just run us through the biomarker analyses that are currently underway? And, I guess, when the go decision is made later this year, where you expect you'd be placing your focus?

Right. So, maybe, Peter, can you go through sort of the full portfolio of things that you're looking at and then maybe comment on the classical monocyte?

Yeah. For the melanoma cohort, specifically, we're looking at the various immune cell subsets based on our hypothesis of entinostat regulating certain myeloid cell populations. We have NanoString as well as RNA seq gene expression data available actually for the majority of patients pretreatment. And a fairly large number, I think up to 16 paired, on treatment biopsies that all inform us around mechanism of action both in responders and non-responders, as well as PDL-1 expression conducted by Merck and tumor mutation burden through whole-exome sequencing. So, I think we'll be in a really nice position to look at responders, non-responders both in terms of blood based, as well as tumor-specific biomarkers over the next couple of months.

And just a comment on the classical monocytes?

So, as we presented the classical monocyte data at ASCO for both lung cancer and the melanoma cohorts, we saw quite a strong trend relative to the response rate. And for the lung that we presented, both a clinical benefit in terms of PFS was also quite significant. And I think, as we indicated, for melanoma, we are waiting to see how the full cohort matures before we can comment on whether or not the trend in response rates also transfer over to the sort of clinical benefit for that cohort. But from response rate perspective, the trends appear to be the same across melanoma and lung. And so far at least, we have the lung clinical benefit also matching the high monocytes. We're not quite sure yet for the melanoma.

Thank you so much for taking my question.

Thank you. Ladies and gentlemen, this concludes today's question-and-answer session. I would like to turn the call back to Dr. Morrison for any closing remarks.

Great. Thanks very much everybody for joining the call. I hope you're all staying cool and well hydrated if you're on the East Coast. We look forward to further communications over the next period.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program and you may now disconnect. Everyone, have a great day.