ImmunoGen Inc (IMGN) 2011 Q3 法說會逐字稿

Good day and welcome everyone to the ImmunoGen third quarter fiscal year 2011 financial results conference call. Today's call is being recorded. At this time for opening remarks and introductions, I'd like to turn the call over to the Executive Director, Investor Relations and Corporate Communications, Carol Hausner. Please go ahead.

Thank you. At 4 o'clock this afternoon we issued a press release that summarizes our financial results for the quarter ended March 31, 2011, the third quarter of our 2011 fiscal year. I hope you've all had a chance to review it. If not, it's available on our website.

During our call today, we will make forward-looking statements. Our actual results may differ materially from the projections made. Descriptions of the risks and uncertainties associated with an investment in ImmunoGen are included in our SEC filings, which also can be accessed through our website.

In our call today our Chief Executive Officer, Dan Junius, will provide an update on ImmunoGen, and our Chief Financial Officer, Greg Perry, will discuss our financial results and guidance. We will then open the call to questions and we'll have John Lambert, our Chief Scientific Officer, here to participate in that. Dan?

Thanks Carol and good afternoon everybody. Thank you for joining us for the call today. I think there's been visible progress in the past few weeks across a number of our clinical stage TAP compounds. For TDM-1 there have been notable achievements in this development for first-line HER2 positive metastatic breast cancer. At the same time, second-line development continues on its path towards registration.

As an aside I'll note that Roche is now using the generic name trastuzumab emtansine for TDM-1.

For IMGN901, interim findings from our multiple myeloma combination trial have been accepted for oral presentation at ASCO and there will also be an oral discussion at ASCO on SAR3419 from sanofi-aventis.

Among our lead wholly owned preclinical compounds, IMGN529 and IMGN853, there was data at AACR that generated quite a bit of excitement.

While my remarks today will focus on these five compounds, these are a subset of the seven compounds in the clinic today developed by us or our partners through collaborations and the six more that are on track to enter the clinic by the middle of next year.

Let me start and talk about what's new with trastuzumab emtansine since our last call. First, the timeline of the planned regulatory submission for first-line use has been moved up by a year. It's now projected in 2014 in both the US and Europe and this is based on the fact that this trial is enrolling faster than had originally been anticipated. The registration strategy is unchanged.

Roche will first apply for second-line use in HER2 positive metastatic breast cancer, and this is expected sometime around the middle of 2012. They'll seek accelerated approval in the US and full approval in Europe. This will be on data generated from the EMILIA phase 3 study.

And I note for those of you who haven't seen it, this study is prominently featured in Roche's 2010 Annual Report where they, among other things, note the number of patients enrolled, the sites available and the number of countries participating within that feature in the Annual Report.

The registration strategy then will move to first-line in HER2 positive metastatic breast cancer and this would be with data from the MARIANNE phase 3 study. That's a submission that has now moved up to 2014.

In terms of other information, there's been an update on the phase 2 study, which looks at TDM-1 versus Herceptin plus chemotherapy. We issued a press release earlier this month with this update, noting that trastuzumab emtansine significantly improved PFS versus the current standard of care.

It was further noted that detailed findings on this would be reported at a medical conference later this year, possibly ESMO or the ASCO breast cancer conference late in the second half of the year.

This is the first randomized trial with a TAP compound to report data. The statistically significant difference in PFS was achieved with under 70 patients in each treatment arm. This is an impressive result in such a small study because you'll note that in the phase 3 first-line setting, the MARIANNE study, that's powered with 330 patients in each treatment arm.

In terms of other indications, Roche has noted that they're working on the long term development program for TDM-1, hopefully which we'll hear more about in the coming months. In the meantime, a phase 2 safety trial is already underway in the adjuvant and neo-adjuvant and preclinical studies are being reported on in gastric cancer. So we're starting to get some hint of what's taking place in other indications but hope to hear more as the year progresses.

Let me turn then to SAR3419, the next most advanced partner product. Recall this compound was created by ImmunoGen scientists and went to Sanofi in a broader research collaboration. It's a TAP compound that targets CE19 looking at the indication -- looking at potentially being used for non-Hodgkins lymphoma and other B cell malignancies. This is a market today dominated by Rituxan.

Reporting on 3419 has been limited to this point. That will change over the next couple of months. First at ASCO there will be both a poster and an oral discussion. This will be on the first data from a second phase 1 trial conducted with weekly dosing. There will also be an oral presentation at the International Conference on Malignant Lymphoma at Lugano the week after ASCO and finally we would expect more data coming out on 3419 at ASH.

From a development standpoint, we expect the phase 2 with this compound to start in the second half of this year.

For IMGN901, our lead wholly owned product candidate that targets cancers that are positive for CD56, we're focused on small cell lung cancer and a related cancer, Merkel cell carcinoma, while also assessing 901 as part of a combination regimen for multiple myeloma.

We're approaching completion of the phase 1 trial assessing 901 for a mix of CD56 positive solid tumors. And this will mark the end of the early generalized examination of this compound. The focus now is on disease-specific trials which we want to advance to decision points and then make a decision about the appropriate path to maximize value generation.

In small cell lung cancer, we're in a dose-finding phase of a phase 1/2 trial assessing this compound in combination with etoposide carboplatin. This study is on track to initiate the randomized phase 2 leg later this year. We would intend to report the first data at a medical conference in the fourth quarter, again, potentially EORTC.

For Merkel cell carcinoma, we're gaining additional experience as a single agent in the solid tumor study, which is now approaching completion. We're currently preparing to start a pivotal combination trial in mid to late 2012 with a final decision on this study to be informed by discussions with regulatory authorities and initial findings from assessment for small cell lung cancer in the combination study.

Our examination of 901 in multiple myeloma for -- with monotherapy has been completed. This study looked at 37 heavily pretreated patients, 41% of whom showed a durable clinical benefit. That had us move to look at 901 in combination with Revlimid and dexamethasone. The study is under way and it's approaching completion of the dose-finding stage.

Once we have that dose to the expansion phase, we will then move forward. We're looking at emending the protocol and actually that's in process right now so that we can target first-line patients in this expansion phase.

The findings that we have out of this combination study have been accepted for oral presentation at ASCO.

For our lead wholly owned preclinical compound, IMGN529 and IMGN853, there are multiple presentations on both at AACR. These presentations were very well received and are an excellent pre-presentation of the quality of our science at ImmunoGen.

IMGN529 will be developed for NHL and CLL and includes a humanized CD37 targeting antibody which has shown pronounced anti-cancer activity in preclinical models. It was developed using our proprietary immunizations method. The conjugation uses multiple mechanisms of action to kill cancerous B cells.

For the antibody component we have pro-apoptotic activity, ATCC and CDC, and in addition, as a conjugate, we have tubulin disruption by our maytansinoid cell killing agent and this takes place without losing the functional activity of the antibody. I think this approach provides significant differentiation of 529 versus competing therapies and 529 is on track for an IND filing this summer.

For IMGN853 we also have multiple presentations at AACR. This is a TAP compound for ovarian cancers and other cancers that overexpress the folate receptor 1. This is on track for IND filing in early 2012.

IMGN853 includes our new [SOFO SPDB] linker. This is a linker that was engineered by our scientists to combat multi-drug resistance and represents continued expansion of our technology portfolio. This will represent the fourth ImmunoGen linker in the clinic.

I think the advancement of 529 and 853 make a strong statement about the development of our own pipeline. Our goal has been to generate one IND every 18 months. It now appears that one IND every 12 months is sustainable. We may choose not to advance each compound ourselves for a variety of reasons but that creates potentially attractive alternatives for us through business development.

With that, let me turn it over to Greg to review the financial results for the quarter.

So as Dan noted, we expect to submit INDs for our next two clinical stage compounds, IMGN529 and IMGN853 within the next 12 months and our research team is generating and advancing promising new anti-cancer therapies at an impressive rate. This speaks to our antibody expertise as well as to the productivity of our TAP technology.

Turning to the financials, the quarter was fairly uneventful. Our revenues for the third quarter of our 2011 fiscal year were $5.2 million, compared to $3.3 million in the same quarter last year, with the difference due primarily to increase revenue in the current period from our partners reimbursing us for clinical materials made on their behalf.

Expenses were $20.3 million compared to $15.5 million in the same period last year with the increase principally due to our increased investment behind our proprietary product programs.

The net loss was $15 million or $0.22 a share as compared with $12.2 million or $0.21 a share in the third quarter of our last fiscal year.

Our guidance for our 2011 fiscal year is unchanged from our last quarterly call. We project that our net loss will be between $60 million and $64 million and that our cash used in operations will be less than $4 million primarily because of the $45 million payment we'll receive from Novartis in October.

We expect to end our fiscal year on June 30, 2011 with between $106 million and $110 million in cash and marketable securities which we believe is sufficient cash to fund our operations into 2013 based on our expense projections and anticipated cash inflow from existing partnerships.

We expect that business development will continue to extend our runway as we bridge to the potential sustained cash inflow from royalties on TDM-1 product sales.

We're pleased with the progress Roche is making with TDM-1. We are very excited by the plans to apply for first-line use in metastatic disease earlier than previously projected.

Dan?

Thanks Greg. I think that that affirms the fact the Company remains in a very good financial position. At the same time we continue to see a high level of interest in the field which I think bodes as a potential for business development. We have remained consistent to our objectives in business development of wanting to be selective, to bring in high quality partners with economics that make sense long term and we remain true to those objectives.

I think that there's great momentum in our pipeline. We see potentially 13 clinical compounds in the clinic by the middle of next year, four of them ours, nine of them through partners, and several expected to be in phase 2 later this year.

Let me walk through the selected and some anticipated events over the next 12 months. Just coming through in the current quarter we would expect an IND filing to take place sometime in the current quarter. We look, as I noted, to have combination data on multiple myeloma at ASCO as well as the SAR3419 data on their weekly dosing.

Sometime around mid-year we're looking for an IND filing for IMGN529 and we should see another IND sometime in the third quarter of this year. That would be another partner IND.

We look forward to seeing the details of the first-line phase 2 data on trastuzumab emtansine at a medical conference in the second half of this year and also in the second half we would look to see the phase 2 portion of the small cell lung cancer study for 901 begin and then having the phase 2 study for SAR3419 begin as well.

In the fourth quarter we would look for weekly dosing of IMGN388 to be presented at EORTC. I would look hopefully to have additional data on IMGN901, actually the first data on the small cell lung cancer study, the phase 1 portion certainly, and possibly some phase 2 data in the back half of the year.

Trastuzumab emtansine, we'd look for clinical data at the San Antonio Breast Cancer Symposium in the fourth quarter. At ASH we would expect to see more data on the multiple myeloma combination study for IMGN901 and then the final phase 1 data on SAR3419.

Looking all the way into the first quarter of next year, we would see the IND filing on IMGN853 and then another new compound coming in from a partner in the first quarter of next year.

So clearly opportunities, significant opportunities for data presentation across a wide variety of compounds. We're very excited about what we're seeing clinically, what we're seeing with the pipeline expansion and maturity, the opportunity with -- for data flow and potential partner interests both from new and potentially further interest from existing partners.

So with that I'll turn it back over to Carol and we'd be happy to respond to your questions.

Great, thanks Dan. We're about to open the call to questions. I would like to ask that question askers limit their questions to one to two per person until everyone in the queue has had a chance to ask questions. We'll then allow you to come back in and ask additional questions if there's time. Operator we are now ready to open the lines for questions.

(OPERATOR INSTRUCTIONS)

George Farmer with Canaccord.

Hi, good afternoon. Thanks for taking my questions. Regarding a press release that came out at Roche in the phase 2 TDM trial, it wasn't clear to me whether that -- the PFS benefit was statistically significant or not. I think the language used was 'significant.' Do you have any insight into that language and whether the data, what the result was statistically significant?

We do and I think I referenced that in my comments George. But either way, that was -- we wanted to confirm that once we saw that to ensure that we understand it correctly. We did make inquiry on that and confirmed that while the release -- their release may not have said ' statistically,' the inference in the actual data did show a statistically significant difference.

Okay, great. And another question if I may regarding 901, I guess the fact that you are preparing or given language that you're ready to or that you will be moving into phase 2 means you're pretty happy with what you've seen in phase 1 in the combo portion of the study, in the dose escalation combo portion of the study?

We're working our way through it and I'm not going to comment on the data because we still are in the dose-finding phase. It's a little bit -- we aren't looking for a strong signal there, George, because we are dealing with somewhat different patient populations.

As we're going through to determine the appropriate dose we're accepting any patients who would receive the etoposide carbo in treatment, so these patients may or may not be CD56 positive. Even if they are small cell or Merkel cell or ovarian patients, they may be later stage. Appreciate that the expansion phase will be focusing on first-line, small cell patients.

So I think we have to be careful of having an expectation of seeing indicative results in terms of activity out of the dose escalation phase versus what we'd be looking for out of the expansion phase.

But you're comfortable with the safety profile that you've seen so far?

That's what we're working through and we aren't going to go to the phase 2 portion until we are comfortable with it but we've been able to go through a couple different dosing regimens or dosing cohorts so I think we have more to learn there but we think that this can be dosed effectively in that combination.

Okay, great. Thanks very much.

Jason Kantor with RBC Capital Markets.

Hi, thanks for taking the question and congratulations on all the good progress with lots of programs. So my questions on some of the earlier stage stuff I guess. In terms of the INDs that you're looking to file, is there anything that's been learned from all of the work you've done to date that perhaps accelerates the phase 1 portions of these trials so that we can get to real proof of concept faster with the new molecules than perhaps we have in the past with the older generation molecules?

I don't think it's -- this is Dan, Jason. I don't think it's things we've learned about the molecules. I think there are things we've learned about the molecules that make these very attractive compounds going into the clinic. I think the learnings are more on execution in the clinical area. And I think that some of that's been addressed through expanding the resources in that area, bringing in some new perspectives of recognizing that we can't be penny wise and pound foolish on the number of centers that we bring forward, understanding which centers we think are going to be most effective in having an active dialogue with the investigators.

So I don't think it's a -- it's not a response based on the science as much on sort of other issues in administering studies. But I do -- I would expect that we will be more effective there and quite frankly, I think we can say as we look at the combination study for multiple myeloma, the combination study for small cell and even some of the work that's been done with 388.

We have been more effective in progressing those in their phase 1 portions than we have with some compounds in the past.

And on your multiple myeloma program, I've always been kind of curious about this one. You've shown some activity but it's been activity in combination with Revlimid, which is also a very active agent. What are you looking for to inform a real go/no-go decision with that program given the competitive landscape in multiple myeloma?

It would have to be very high activity. There's two things there. We know that just Revlimid and dexamethasone alone should generate a response rate. I think you're in roughly the 60% range and so it's a question of what incremental benefit do we see. What's the durability of the benefit and what's the nature of the response. So I think that will be informative.

At the same time I think we're looking at 901 as an asset in totality and I think that given the activity that we've seen as monotherapy, this does it for us, the opportunity to potentially build the broader asset value, because as we've discussed, this is an asset that we would potentially partner at some point in the future and we think given where we are and the activity that we've seen as monotherapy, it's worth fully understanding the potential in multiple myeloma in combination.

Thank you.

Shiv Kapoor with Morgan Joseph.

Thanks for taking my question. Following the phase 2 TDM-1 data, statistically significant data, has there been any clinical trial design changes to any of the phase 3 programs that are -- any of the studies that are being completed or any additional studies that have -- are being planned since these data came about?

Not that we're aware of. I think that the guidance that we've received or the information that we received associated with the bringing the MARIANNE study and potential filing forward a year, I think is strictly driven by enrollment as opposed to any potential change in design.

So while I think that the results as I noted showing statistically significance in that first-line phase 2 study given its size is extremely impressive, there's not been any disclosure to say it's resulted in any modification of any individual studies.

And they're probably not seeing any changes, any significant changes in enrollment trends. They'll likely see more of that when the final results come out. Is my assumption correct?

I don't know. They're already seeing very good changes in enrollment patterns, given the fact that they've been able to move that forward.

Right. And the exact data, when will the data be available on how (inaudible)?

We understand it's going to be sometime third quarter, so the opportunities then become ESMO or the ASCO conference for breast cancer. I think that's speculation on our part but the guidance is probably third quarter.

Okay, great. Thanks a lot.

Bret Holley with Oppenheimer.

Yes, thanks for taking the question. What's a reasonable time line for the full phase 2 data for 901 in small cell lung cancer? And I guess the second question is, is 110 patients worth of data enough to really inform, potentially inform a pivotal trial following that trial or do you foresee having to run a phase 2b trial following the phase 2 portion of the trial?

We do think that that's going to be enough to give us a pretty strong signal, in part because for small cell, the bar for patients unfortunately isn't very high. It's -- the progression is so rapid in that particular disease that we think that the way the study is designed and powered, that we'll be able to get enough information to make a decision on taking it forward or not.

Now your question on when might we have a good fix on that? It may be -- at the moment I guess it may be in the back half of 2013 when you think about getting to the dose finding phase and then beginning to enroll across a number of centers. It's going to probably take us a year and a half plus. We've got a number of centers lined up and then we need another six months to get the full readout of the data.

Okay. Thank you very much.

Sure.

Ling Wang with Brean Murray.

Thank you for taking my question and congratulations on the progress. So my first question is when can we see the -- first see any update readout from the Agilent study for TDM-1?

Not clear, Ling. I think that would fall into the category of what we would hear about a development update from Roche around TDM-1. It only began to enroll in October so I just don't know how rapidly that's going to enroll. It's not a terribly large study and it's focused on safety so we'll -- but there's been no guidance in terms of when we would see that.

As I noted, there was some preclinical data around gastric that did show that TDM-1 did have a benefit in those preclinical models. Again, I would hope but don't know whether that would fall into whatever we would hear from Roche on that particular topic.

I see. And if I may, I just wanted to clarify the -- a couple of data presentations. So the phase 1 portion of the IMGN901 in small cell lung cancer, that data should be expected at EORTC, is that correct?

That's our current thinking, yes.

Okay. How about IMGN388, is the data at the same conference or ESMO?

That would be the weekly dosing because as you know we're looking at a separate dosing schedule there. That would also -- we're targeting EORTC for that as well.

I see, okay. Great. Thank you very much.

Sure.

Brian Klein with Lazard Capital Markets.

Great, thanks. Nice progress on the quarter. So you mentioned that the enrollment for the MARIANNE trial has picked up significantly. What are your expectations for data readout from that trial, given that they're planning to file in 2014?

And then also for Greg, I was just wondering if you're expecting any milestone payments in relation to the IND filings from collaborators next year? Thanks.

And then for that last portion then, generally that -- generally we would expect to see payments associated with an IND filing so there would be some anticipated.

On the first question, Brian, in terms of readout, there's been no guidance about potential readout on either MARIANNE or EMILIA so it's 2014. I don't know if that means -- I would assume that they would be disclosing data before filing so if it's a mid-year filing, maybe there's something at ASCO. If it's early-year filing, maybe there's something at San Antonio, but there's been no commitment to any interim look so I think we just have to wait and see.

Would you guys be willing to make a guess?

I guess I'll bet that we'll see the phase 2 data in the third quarter but in terms of the phase 3 data, no, really. I'm flying blind. I just don't know.

Okay, thanks a lot.

Sure.

Karen Jay with JPMorgan.

Hi, this is Karen in for Cory. I have two quick questions. The first is on 901. You have a bit of downtime between now and when the Merkel cell pivotal trial might start so in the interim I was wondering if you were continuing to try to identify patients seeing that it's a pretty rare indication but it might actually help enrollment go faster.

Because, as you say, we're sort of in the period, we'll finish the monotherapy study which doesn't target Merkel cell specifically but which has given us our Merkel cell experience to date and then there will be something of a gap before we'd be ready to start the pivotal study.

We're not -- we don't have any efforts underway to identify patients directly, Karen. We do have in the active dialogue, there's a consortium of Merkel cell specialists around the US and some actually overseas with whom we maintain an active dialogue. And I think as we reach a decision and should that be to move forward, we would look at working through those docs because they see many of the Merkel cell patients or consult with other doctors who are seeing those, so that would be an avenue.

But at the moment, given the fact that we're out in the back half, the mid to back half of next year, we haven't spent a lot of time putting together recruiting strategies. My expectation is knowing that there are advocacy groups for virtually any disease you want to find today, we would begin to look there as well in terms of establishing a dialogue and seeing what we can do to work with them around an appropriate patient recruitment strategy.

Okay, great. And then my second question is on TDM-1. On Roche's quarterly call they were asked about their plans for TDM-1 in the adjuvant setting and their response was that they would sort of be looking at this over the next few weeks and I was wondering if you might be able to provide more detail as to whether or not we might get some sort of decision or a go/no-go decision in the next month or so.

I don't have any detailed information that would help there. I think you look at it logically and say a meaningful portion of the Herceptin market today is in the adjuvant setting. You have a therapy that in the metastatic setting appears to be superior to the current standard of care. I think that they would want to explore very thoroughly whether they can enhance the response rate or the benefit in the neo-adjuvant and adjuvant setting with TDM-1, if for no other reason than to further protect the franchise as you see bio-similars becoming closer and closer to a reality.

But that's my reasoning around it. That's not based on any insight from Roche.

Okay, great. Thank you.

Sure.

David Miller with Biotech Stock Research.

Great, good afternoon and congratulations on the progress. The first question I have is can you -- as you've given us some timing about when you might start Merkel cell trial, but can you give us some timing on when you will make the no-go -- go/no-go decision?

It's going to fall out from what we see around safety coming out of the phase 1 study. It's also going to be impacted by the additional data that we see coming out of the monotherapy study for Merkel cell patients because that will be somewhat informative and we still have patients that are enrolling and being dosed there. And it also is going to depend on what the dialogue is with regulators both here and Europe that gives us some insight into what the timing would be for a study.

So we haven't initiated those dialogues. We really can't do that effectively until we have the potential dosing in Merkel cell. So we just have some -- there's a sequence that we have to run through to allow us to have intelligent discussions with the appropriate parties and also separately to have the data that we need to make an informed decision.

Right. I mean I understand all the stats, which is why I was asking as when you might be able to make the go/no-go decision. I mean, would that be an announcement that would lead the actual start of the trial by weeks or coincide with the actual start of the trial or would we be hearing about a go/no-go a year ahead of time or --?

I would expect it would be probably in the six to nine month window. I don't think it would be weeks ahead of time. We're looking at ways that we can have an opportunity to get some insight from the phase 2 portion of the small cell study without completing the dosing to all patients that would further be an important piece to our decision process.

Okay, and the second question I have is just a clarification of something that Greg said. You said -- did you say you would have cash through the -- with the certain assumptions that you would have cash through the end of fiscal 2013 or calendar 2013?

It's into calendar 2013.

Okay, perfect. Thank you very much.

(OPERATOR INSTRUCTIONS)

Mark Monane with Needham & Company.

Good morning. Congratulations on the progress. I have a quick question on IMGN901. To clarify, the Merkel pivotal trial, what kind of data do you expect to see from the small cell lung cancer [in order to form] a go/no-go decision. [Is it more about 50] or do you want to see strong efficacy (inaudible) to give you enough conviction to move to a pivotal trial in the Merkel cell trial?

I think it builds. Certainly we're going to want to understand safety first and we'll see that as we go through the dose escalation phase. But because there are significant biological similarities between Merkel cell and small cell, we do want an opportunity to get some understanding of what type of an efficacy signal we're going to see in the targeted patient population because the expectation is in Merkel cell similar to what we're doing in small cell. We would be looking at first line patients and we'd be looking at it in the same combination that we're using in the small cell study.

So A-it's safety, and we're working our way through that right now, and then B-are we seeing an acceptable level of activity that would give -- that would encourage us to say we should be pursuing Merkel cell.

(Inaudible) Also a question on the multiple myeloma combination trial. I was wondering what the current dose level is for IMGN901 and have you seen enough dose response in that trial?

I'm sorry, could you repeat the question?

For the multiple myeloma combination trial, IMGN901, what is the current dose level and have you seen enough dose response?

We haven't disclosed the dose response. We will have updated information on that at ASCO. I think, [Tara], what was the last dosing as of ASH?

(Inaudible) just starting that.

So we were just at 112 in combination with Rev/Dex, just at the beginning of that cohort when we last reported data at ASH.

Okay, thanks.

Sure.

And that concludes the question and answer session. I'll turn it back over to Carol Hausner for any closing remarks.

Great. I'd like to thank you all for your interest and invite you again to call at -- call me at 781-895-0600 with any additional questions and have a good evening. Take care.

That concludes today's conference call. We appreciate your participation.