ImmunoGen Inc (IMGN) 2017 Q1 法說會逐字稿

Good day, everyone, and welcome to the ImmunoGen First Quarter 2017 Financial Results Conference Call. Today's call is being recorded.

And at this time, for opening remarks and introductions, I would like to turn the call over to Monique Allaire with Thrust Investor Relations.

Thank you, and good morning, everyone. Earlier today, we issued a press release that includes a summary of our recent progress and our financial results for the quarter ended March 31, 2017. The press release and a recording of this call can be found under the Investors section of our website at immunogen.com. With me today are CEO, Mark Enyedy; and CFO, Dave Johnston; Anna Berkenblit, Chief Medical Officer and; Rich Gregory, Chief Scientific Officer, will join us for the Q&A session.

During today's call, we will make forward-looking statements and our actual results may differ materially from such statements. Descriptions of the risks and uncertainties associated with an investment in ImmunoGen are included in our SEC filings.

With that, let me turn the call over to Mark

Thanks, Monique. Good morning, everyone, and thank you for joining us today. We will start the close morning by briefly reviewing our progress with the business over the last quarter, providing an update on our portfolio and highlighting some of our upcoming milestones. Dave will then cover our first quarter financial results, and we'll conclude by opening the call for questions.

Beginning with our operational performance to start the year, we made significant progress towards the strategic priorities we set for the business with a focus on advancing our portfolio, supporting our partners and driving continued innovation in ADCs. You will recall that our #1 priority is complete development and obtain approval for mirvetuximab soravtansine by 2020. Mirvetuximab is our internally developed first-in-class ADC targeting folate receptor alpha or FR alpha, as we refer to it. This is a marker expressed on a number of tumor types, including ovarian, lung and endometrial cancers. In January, we had achieved an important milestone by treating our first patient with mirvetuximab in our FORWARD I registration trial. FORWARD I is a Phase III randomized study designed to compare mirvetuximab with the current standard of care and up to 333 patients with platinum-resistant ovarian cancers, whose tumors expressed folate receptor alpha at medium or high levels. The eligibility criteria for this trial include patients treated with up to 3 prior therapies, which represent a market of approximately 12,000 to 14,000 women in the U.S. alone and a similarly sized population in Europe. Since enrolling our first patient, we've initiated more than 40 sites in North America and Europe and are on track to activate at least 100 sites in these geographies before the end of the year.

I commend our clinical and medical teams for the work they've done to accelerate enrollment in this important study. In addition to advancing FORWARD I, we've gained increasing recognition from the medical and scientific communities through a number of data presentations demonstrating the breadth of our ADC expertise. We presented expanded Phase I data from the biopsy cohort from mirvetuximab at the SGO annual meeting in March, which indicate that archival tumor tissue can reliably identify patients with FR alpha positive platinum-resistant ovarian cancer. More importantly, these data support the patient selection strategy for the FORWARD I trial. We also delivered 9 presentations at the AACR annual meeting in April, highlighting ImmunoGen's innovative technology platform and novel ADCs targeting a range of tumor types. Our partners also continue to make notable progress over the quarter. Bayer completed enrollment of its Phase II registration trial assessing anetumab ravtansine for the treatment of mesothelioma, and Takeda advanced into preclinical development the first of our novel DNA-alkylating payloads directed to a solid tumor target. Looking ahead to the rest of 2017, we expect several key data readouts from our proprietary portfolio. At the ASCO annual meeting in June, we will be presenting new safety and efficacy data relating to mirvetuximab, which we will cover in greater detail when the abstracts become available later this month. We plan on presenting the initial Phase I clinical data in mid-2017 for IMGN779. This is an anti-CD33 ADC we are developing for acute myeloid leukemia. This is the first ADC in the clinic to deploy our novel DNA-alkylating payload, which we referred to as our IGN programs. In the third quarter, we also planned to file an IND for our second IGN programs, IMGN632, which is an ADC targeting CD123 that we intend to develop for multiple hematological malignancies. Lastly, we expect to advance the first candidate into our collaboration with CytomX into preclinical development this year. So the remainder of the year promises to be rich in data from our proprietary portfolio. We look forward to updating you on our progress with these programs as well as those of our partners.

And with that, I'll hand the call over to Dave to review our financials.

Thanks, Mark. Our financials were discussed in some detail in our press release issued early this morning. So I will just review some of the highlights. Revenues for the first quarter ending March 31, 2017, were approximately $29 million, which includes $6 million in partner milestone payments, $13 million in amortization of a noncash fee related to our license agreement with CytomX and $7.6 million in noncash royalty revenues. The balance of our revenues in this period were from research and development support and clinical materials.

Operating expenses in the first quarter were approximately $41 million, driven by $33 million of R&D expenses, the remainder are G&A expenses. For the first quarter, ImmunoGen reported a net loss of about $17 million or $0.20 a share. Cash used in operations for the period was about $33 million. We ended the first quarter with approximately $127 million of cash and cash equivalents and $100 million of convertible debt outstanding. We expect this will allow ImmunoGen to fund our operations into the second quarter of 2018. Lastly, our financial guidance for 2017 has not changed.

So with that, I'll turn the call back over to Mark.

Thanks, Dave. Just to wrap up, in 2016, we laid out 4 priorities for the business. One, completing development and obtaining approval from mirvetuximab by 2020; two, accelerating the development of our early-stage portfolio with an emphasis on our IGN programs; three, building upon our leadership position in ADCs and continuing to drive innovation; and four, leveraging our platform to support our existing relationships and pursue new collaborations that will allow us to generate revenue, mitigate expenses, enhance our capabilities and expand the reach of our innovation. We started 2017 with significant progress towards each of these objectives and look forward to updating you as our business evolves over the remainder of the year.

And with that, we will open the call for questions.

(Operator Instructions) And we'll take our first question from Michael Schmidt from Leerink.

And I had one, Mark, regarding ASCO. Can you just help us, or investors understand what expectations should be regarding the upcoming updates there from mirvetuximab? And then I had a follow-up.

Yes. So mirvetuximab will have essentially 2 data presentations. The first relating to a pool dataset, essentially aggregating the totality of our patient experience in the Phase 1B setting. And then the second will be an update on our progress in FORWARD II. And as a reminder, this is a combination -- a set of combination cohorts, with mirvetuximab combined with Avastin, Keytruda, liposomal doxorubicin and carboplatin. So what we plan to do, Michael, is provide greater detail on the data presentations once the abstracts are released in the middle of the month.

Okay, great. And regarding the balance sheet, obviously, you said you have -- you guided to cash into the second quarter of 2018. I was just wondering in this context, how you're thinking about additional sources of maybe nondilutive capital in -- in that context, was wondering specifically, how do you think about additional business development opportunities regarding some of your remaining pipeline assets?

Sure. So we share your view on the balance sheet and our focus intensely -- everything is dilutive at one level I suppose. But fundamentally, as we mentioned on our last call, we look to prioritize the portfolio and so we chose to target our B-cell programs for out-licensing and so there's active interest there, which we are pursuing as we speak. In addition to that, as you know, we have a number of agreements that provide for downstream royalty obligations. And so we continue to explore the possibility of monetizing those royalty streams for upfront cash. And then finally, we are entertaining interest in our development stage programs with respect to codevelopment and cocommercialization, arrangements for those programs that would enable us to generate upfront cash as well as mitigate our ongoing expenses, while retaining substantive commercial rights in those programs downstream. And so we are actively exploring each one of those avenues as we speak with the goal of, as you say, improving the shape of the balance sheet.

And then one question regarding the AML program. You talked about the IGN payload and obviously, those 2 assets you mentioned are in a space that is somewhat competitive and I was wondering, if you could just highlight potentially sources of differentiations from other ADCs that have DNA-acting payload in development?

Sure. So I'm going to ask Rich Gregory to address that.

Thanks for the question, Michael. So from the beginning of these programs, what we've started to is differentiate the mechanism of action from some of the other DNA-targeting payloads. The key differentiator is that our payload basically modifies one strand of DNA. It doesn't cross-link and therefore, we have a different level of toxicity on both tumor and normal cells. And what we see is in practice, in preclinical models, as we have the same level of potency against tumor cells with our payload as you see with the cross-linking drug such as Seattle. So we find that we have a higher level of tolerability, meaning we can dose more frequently and more often. We think this will manifest itself as a hopefully superior profile in the clinic.

And we'll take our next question from Jessica Fye from JPMorgan.

I just wanted to ask about the FORWARD I study. And now that you're getting kind of sites really up and running enrolling patients, if that affected your view at all on the ultimate time it's going to take enroll that trial?

Thanks, Jessica. No. So we're expecting to undertake the futility analysis in early '18 and have results from the study in early '19.

We'll take our next question from Matthew Harrison from Morgan Stanley.

This is Cyrus on for Matt. So I guess, the first one is, for this pooled analysis that we're going to see at ASCO, what sort of new information can we expect versus the prior cohorts and data in terms of efficacy?

Yes. So the data we showed at ASCO last year was the 46 patients cohort, which was essentially, at all comers up, I guess, up to 5 prior lines of therapy. We then added to that dataset with 27 patients from a biopsy cohort. Again, these were heavily pretreated patients with a different goal. And then, finally, we ran a 40-patient cohort in patients, platinum-resistant patients received 3 or 4 prior lines of therapy and I guess, there were some platinum-sensitive patients in that cohort. So essentially, what we're doing is taking all 3 of those cohorts and adding them together and we'll have both efficacy and safety data from that pool analysis. And we'll also have a subset of those patients who would have been eligible for FORWARD I.

Got it. I guess, my next question, for the FORWARD II safety data presentation, are you going to see any preliminary efficacy? Or we'll just see the dose escalation safety?

We'll have preliminary efficacy data in that presentation.

And then what, sort of, key theoretical toxicities are you guys concerned with for FORWARD II?

I'll let Anna address that question. I mean, what we've been able to see as we've dose escalated is that we are proceeding the dose of the comparable or the combination agents that are used in the ovarian cancer treatment setting. And so we're at our preferred Q3 weekly schedule plus what's regularly used there. And so we're pretty excited about the tolerability profile of the combination agents. Anna, if you want to add to that?

Yes. Based on the monotherapy, safety profiles for mirvetuximab soravtansine, we did not anticipate any significant overlapping toxicities for any of these combinations. In particular, because mirvetuximab soravtansine is targeted to FR alpha positive cells. It does not have a lot of marrow suppression cells. We did not anticipate we would see any sort of synergistic toxicity on the marrow and indeed, as Mark said, full dose mirve is combinable with full doses of each of these agents. Similarly, we're not seeing alopecia with mirvetuximab soravtansine like you would with other tubular-directed therapies. And it doesn't have the hand-foot syndrome that you would see with Doxil. So we're really quite confident around the ability to combine mirvetuximab with full doses of each of these agents. Avastin has its own set of toxicities. We don't see hypertension, for example, with mirvetuximab. And pembrolizumab of course, has its own immunology related adverse events and profile. Again mirvetuximab, yes, it's an antibody, but it's targeted to FR alpha positive cell. So we didn't expect to see increased stimulation of the immune system and autoimmune problems. So, so far, so good.

Got it. And I guess, one last question. For 779, what kind of data can we expect by midyear? And should we expect some sort of response rate data? Or could there be enough follow-up for durability?

Yes. So we expect to present preclinical data for 779 as well as clinical data from the Phase I dose-escalation study. And we will share all of the data that we have available from dose escalation in terms of safety, pharmacokinetics, pharmacodynamics and antitumor activity. We're still in the midst of dose escalation. We have not hit MTD yet.

And we'll take our next question from John Newman from Canaccord Genuity.

All my questions have been answered.

And we'll take our next question from Matthew Eckler from RBC Capital Markets.

So we're starting to see a changing landscape for the treatment of ovarian cancer with the approval of the PARP inhibitor. So I wondered if you could just talk broadly a little bit about how you think that mirvetuximab did then to this changing landscape.

Yes. So I'll start, but I'm going to quickly hand it over to Anna. So our initial approval is targeted for platinum-resistant disease and right now, the standard of care there is single-agent chemotherapy, and we also see combination use with Avastin. But we think there is a substantial room for improvement in terms of the response rate, progression-free survival and also, the tolerability of those agents, and we think on each one of those parameters, mirvetuximab will be well positioned. As you know, we've moved ahead with FORWARD II to evaluate mirvetuximab in combination. That will give us an additional leg-up in platinum-resistant disease and also, give us some early observations with respect to how we might think about managing platinum-sensitive patients either in initial therapy or even potentially, in the maintenance setting. So we think, when we look at the profile of mirvetuximab today, that's very well positioned to address both of those segments, again, with an initial approvals of monotherapy in the resistance setting. And then I'm going to ask Anna to sort of address the whole PARP inhibitor environment. We think this is good news for patients. And we think we've got a role to play here as well so.

Thank you, Mark. See let me start with PARP inhibitors in the platinum-resistant setting because that's the initial space in which mirvetuximab is going to be approved. And the data for PARP inhibitors in platinum-resistant disease, even in BRCA-mutant patients, which are about 20% of the ovarian cancer population is pretty underwhelming. I mean, it's about the same as chemotherapy. So for example, olaparib and rucaparib then have about or 25% to 30% response rate in platinum-resistant BRCA-mutant patients. So only that 20% that have mutation. They really have no appreciable activity in the BRCA wild-type setting in platinum-resistant disease with a monotherapy response rate of 4% to 10%. So that's quite different from what niraparib showed in the platinum-sensitive maintenance setting in all comers. So we do not think that PARP inhibitors will be used in the platinum-resistant settings. Platinum sensitive, no doubt, they are really changing the landscape and the standard of care is really evolving. And I think that is wonderful for patients. We do believe that mirvetuximab will combine well, for example with PARP inhibitors, and we have an IST that's going to start up combining with rucaparib. We and Clovis are cosponsoring that. So we are using that as a potential combination approach. And then bevacizumab, let me remind you that it was approved. So Avastin was approved in December last year, in the platinum-sensitive recurrent maintenance settings. So the same setting that niraparib has been approved in. So this is a nav we've used for all comers, and it will be really interesting to see how the PARP inhibitors are used in the platinum-sensitive setting. The greatest benefit is for the BRCA-mutant patients. The wild-type patients also benefit. So it's an evolving landscape, and I think mirvetuximab's really nice tolerability profile will allow us to move up into that space potentially in either or both of these combinations. And furthermore, because we are able to combine with carboplatin, there is the opportunity for us to be the preferred doublet for carboplatin-based therapy as well. So we have a lot of options. Right now, our initial focus is on enrolling our first trial and getting the drug approved and then expanding our opportunities.

And we'll take our next question from Mara Goldstein from Cantor Fitzgerald.

I had a question I guess, on FORWARD II which is collecting or plans to collect biopsy data. And I'm curious as to how much biopsy data you intend to have for this trial? And when we may see that data?

So Mara, that's a nice question. We did present the biopsy data from the -- our initial biopsy cohort at SGO a couple of months ago. So that's that 27-patient cohort that Mark mentioned, where patients had archival tissue for screening and patient selection and then they had a pretreatment biopsy and a posttreatment biopsy. What the data at SGO showed was that archival tissue is really sufficient for patient selection and that's the strategy that we're using in our Phase III trial. In our combination study, FORWARD II, where we're combining with the 4 different agents. The only arm in which we are doing some exploratory biomarker work is actually the pembrolizumab arm. Merck has supplied pembrolizumab for us for that study, and we are going to be quite interested in those translational medicine of the exploratory objectives. But we won't have any of that data at ASCO.

Okay. And I also notice, I think, assuming it's an investigator-sponsored trial in triple-negative breast cancer with mirvetuximab. And I'm just curious as to the rationale for that?

That's a great question, Mara. Thank you. We have partnered with the NCCN, and we have committed $2 million in that partnership for them to run several preclinical studies as well as 3 clinical studies, 2 of which are neoadjuvant triple-breast cancer studies. The rationale for that is that FR alpha expression is overexpressed in triple-negative breast cancer, not as highly frequent as in ovarian cancer. So it's not our initial indication. But certainly, we're quite interested about exploring triple-negative breast cancer. What I like about these NCCN studies is that they are neoadjuvant studies, so we'll have pre- and post-biopsies, and we'll get a readout rather quickly from a proof-of-concept perspective.

Okay. And if I can just ask, if you don't mind, a nonclinical question. And that is, can you just remind us of the economics on the buy agreement for anetumab ravtansine?

Sure, Mara. The -- there's significant amount of milestones. I don't recall the exact number, but it's into the high -- like it's north of $150 million and the royalties are 4% to 7%.

And we'll take our last question from Boris Peaker from Cowen and Company.

Just wanted to touch base regarding the biz dev opportunity. Specifically, you've already mentioned potentially, licensing from noncore assets to build up the cash balance. I was just wondering, previously you've discussed potentially out-licensing mirvetuximab ex U.S. Is that still on the table? Is there a specific dataset that you think your potential partner is waiting for prior to closing the deal? Just want to kind of get a sense of where that may stand?

Yes. So we've had inbound interest with respect to the ex U.S. rights to mirvetuximab. And so we're evaluating those proposals in light of where we are with the program today. And as you say, the data that's forthcoming and what impact that might have in terms of the value that we can command in one of those transactions. I'd be reluctant to comment further in that other than it's inbound interest and our view is, we need to lead commercialization of the product in the U.S. ex U.S., this is still a relatively concentrated market even outside the U.S., particularly in Europe and so this is something that a company at ImmunoGen size could effectively manage. That said, if there's an opportunity to generate some near-term cash, reduce the ongoing expenses of development that's something that we need to consider and as I say are entertaining at this point.

Great. And on your CD23 targeting ADC, I'm just curious seeing the competitive nature of this space now. What immunologic malignancies specifically, do you think is, you're thinking of targeting?

Sorry, CD123, Boris?

Yes.

Yes. So I think the potential indications there are AML, MDS, PTDCN and BALL, are the things that we are contemplating as we speak. And we will make a decision on that in the next really couple of months. As I mentioned, we expect to file the IND, but before the end of the third quarter and have our first patient in before the end of the year.

And we'll take our next question from Biren Amin from Jefferies.

Just on your CD33 program, with the SPN program they ran into some issues with FDA temporarily. And we've gotten clearly, some transparency around that program in the last few months. What I guess, key considerations have you incorporated from learnings from, I guess -- at least safety learnings from that program into your Phase I, II trial?

Thanks, Biren. So this is Anna. So our drug, as you heard from Rich, has a slightly different mechanism from the other CD33-targeted ADCs. Both Mylotarg and Seattle Genetics CD33-directed ADCs cross-link DNA. So these cause profound damage that's difficult for cells to repair. That's probably playing into the venoocclusive disease that has plagued both compounds in AML patients, particularly, those in the peritransplant settings. The fact that this is also seen with indatuximab, a CD22-directed ADC with calicheamiacin the same payload as Mylotarg suggests that it's not a target related. So we think that at least, theoretically our drug has a potential safety advantage. And therefore, we are proceeding with our Phase I dose escalation trial. Of course, we are monitoring patients for potential DOD. But we're not, at this point, excluding patients because they've had a prior transplant. We are proceeding with AML patients and typically, in Phase I trials you enroll patients who have relapsed refractory disease and who may be status post-transplant.

And we'll take our next question from John Sonnier from William Blair.

Mark, you are about a year or so into the new role. And I'd want you to -- just to talk about how it's gone. You came in obviously, with a set of expectations. And what's gone better, what's gone worse? If you had to make some difficult structural decisions right out of the gate? But just wanted to hear how you're thinking about the job now versus a year ago? And again, what gone better and worse over the past year?

Yes. Thanks for the question. I appreciate. Yes, so first anniversary is on the 16th. And obviously, John, there have been some things that were different. The Board of Directors asked me to join ImmunoGen to really oversee a transformation of what had been a very productive research organization and had also translated that into early-stage development to a company they could deliver products to the market and commercialize on its own bottom. And I would say, the things that I had hope for on the upside materialize in the way, and which I'd hoped. So success in this business begins with great people, and I inherited a great team. And that team has really rallied over the course of what's been a challenging year to advance the business. And so in terms of moving mirvetuximab into pivotal studies. That came as we had expected it to, and then we got a good design, good correspondence with the agency and are well positioned to deliver on the time lines that we've projected for you. When I look at the platform, we continue to be very productive in terms of innovating new ADCs and moving those into the clinics. So we're making great progress with the CD33 program and the profile that drug is emerging as we had hoped it would, both in terms of efficacy and importantly, in this setting, the tolerability. And we're on track to file our next program within the next quarter. And so as I look at it, our principal challenges will be around capital. That's been the focus of some of the questions on this call. I think we've got a good handle on that in terms of looking at our assets and devising different strategies to raise capital, whether it's out-licensing, monetizing royalties or pursuing codevelopments relationships. And so I think, we articulated 4 priorities for the business, which I reviewed at the end of my prepared comments today. And we're very much on track to do that and importantly, as we've gone about executing on those objectives, I really have seen the transformation in-house, in terms of the agility of the organization and the level of focus and discipline and really turning our attention to what it means to bring a product to market and being responsible for delivering the patients around the globe. So I'm excited about our prospects. I was excited to join the company. We had a few challenges for sure. We will certainly have more to come, but I'm quite sanguine about our prospects. But appreciate the opportunity to talk about it.

That concludes today's question-and-answer session. I'd like to turn the conference over to Monique Allaire for additional or closing remarks.

Thanks, everyone, for joining us today. Don't hesitate to rejoin if you have any follow-up questions.

This concludes today's presentation. Thank you for your participation. You may now disconnect.