Immunic Inc (IMUX) 2023 Q3 法說會逐字稿

Good morning, and welcome to Immunic's third quarter 2023 earnings call. My name is Jessica Breu, Head of Investor Relations and Communications at Immunic. I will also be the moderator on today's call.

Speaking on the call are Dr. Daniel Vitt, our Chief Executive Officer and President, as well as Glenn Whaley, our Chief Financial Officer. Please note that all participants will be in listen-only mode and this event is being recorded. (Operators Instructions)

Before we begin, I would like to remind you that this presentation may contain forward-looking statements. Such statements can be identified by words such as may, will, expect, anticipate, estimate or words with similar meaning and such statements involve a number of risks and uncertainties that could cause Immunic's actual results to differ materially from those discussed here.

Please note that these forward-looking statements reflect Immunic's opinions only as of the date of this presentation, and it undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Please refer to Immunic's SEC filings for a more detailed description of the risk factors that may affect Immunic's results and these forward-looking statements.

I would now like to turn the call over to our CEO and President, Dr. Daniel Vitt to begin the presentation. Daniel?

Yeah, thank you, Jessica. I would also like to welcome everybody to today's earnings calls. Earlier this morning, we announced our financial results for the third quarter ended September 30, 2023, in our press release and Form 10-Q.

During the call today, we will walk through our third quarter 2023 and subsequent highlights, financial and operating results as well as anticipated upcoming milestones. As Jessica noted and after the presentation, you will have the opportunity to ask questions.

Let's start with a review of our third quarter 2023 and subsequent highlights. I would like to begin with our vidofludimus calcium development program in multiple sclerosis. In August, we completed enrollment of our Phase 2 CALLIPER trial of vidofludimus calcium in patients with progressive multiple sclerosis for PMS.

A total of 467 adult patients with primary MS or active or non-active secondary PMS were randomized to either 45 milligram daily doses of vidofludimus calcium or placebo. Patients were enrolled at more than 70 sites in North America, Western Central and Eastern Europe.

A few months later in October, we reported overwhelmingly positive interim data from this Phase 2 CALLIPER trial. In total, 203 patients were included in this analysis. The overall population, which includes all subtypes of PMS saw 22.4% improvement in serum neurofilament light chain or NfL for vidofludimus calcium over placebo at week 24.

We believe that this is a substantial and meaningful difference in favor of vidofludimus calcium and SPMS. population. A statistically significant difference was falling for serum NfL at week 24 between vidofludimus calcium and placebo with a p-value of 0.01.

If you look at the subtypes of progressive MS to the right, you can appreciate this difference in NfL at week 24 was consistently strong throughout all subtypes of progressive MS. I would like to point out that we saw a 20% reduction for vidofludimus calcium versus placebo in SPMS, meaning the patients who have no focal inflammation activity but disease progression. This subtype is a difficult to treat population with no relevant FDA approved therapies available.

This slide puts our CALLIPER interim data into the perspective of historical third-party studies in the same progressive MS subtypes. On the left, we display the data for PPMS compared to the Oratorio study for [ocrelizumab] which showed the spread of NfL element between active and placebo at 24 weeks of [12.4%].

In the CALLIPER trial, we observed an 18.8% improvement of active drug over placebo in PPMS at week 24. The results of this Phase 3 study led to approval of ocrelizumab for treatment of PPMS.

In the center of the slide, you see historical data for secondary progressive MS, both for not-active and active SPMS. In comparison vidofludimus calcium was able to show a substantial reduction of NfL in both the active and non-active populations.

To our knowledge this is the first time that such a substantial effect in NfL has been shown in non-active SPMS patients, again, which is the PPMS subtype with the highest unmet medical need. The right side of the slide shows comparison between our Phase 2 EMPhASIS data for vidofludimus calcium in RRMS versus our historical relapsing MS studies to complete the picture.

In summary, we believe the clear separation observed for serum NfL for vidofludimus calcium over placebo in this PMS patient population represents another major step forward for what potentially could be a first-in-class Nurr1 activator for MS. The strong signal also points to more likely positive outcome of the overall CALLIPER trial also and clinically relevant end points like prevention of disability worsening.

In October Dr. Robert J. Fox from Cleveland Clinic, who is also the coordinating investigator of our ENSURE and CALLIPER programs, presented data from our Phase 2 EMPhASIS trial of vidofludimus calcium in RRMS in a e-poster at the Joint ECTRIMS-ACTRIMS Meeting. As a reminder, vidofludimus calcium showed an improvement in serum NfL in both treatment arms of 30 and 45 milligram over placebo.

Just recently, we received a notice of allowance from the USPTO for patent covering the treatment of relapsing MS with a specific dose to a vidofludimus calcium. This includes a daily dose of about 10 milligram to 45 milligram of vidofludimus calcium and other source, as well as the free acid form of the treatment for relapsing MS, also covering the 30 milligram dosage used in our ongoing twin Phase 3 ENSURE trials.

The claims are expected to provide protection into 2041, unless extended further. This patent significantly bolstered the multi-layered proprietary IP position we have built around our late-stage program for patients with MS.

Moving to our IMU-856 program. In July, we hosted a virtual celiac disease expert roundtable to discuss ongoing active celiac disease or OACD, a serious lifelong autoimmune disorder and the substantial unmet need for therapeutic solutions.

We were grateful and honored to have been joined for this event by the renowned thought leaders from Harvard Medical School, the Mayo Clinic and the Celiac Disease Foundation.

During the roundtable, our Chief Medical Officer, Andreas, also provided an overview of IMU-856 program, including a positive Phase 1 trial results in celiac disease patients released earlier this year in May, which I will highlight again in just a moment.

Also in October, we presented two abstracts at the United European Gastroenterology Week, UEGW 2023. My colleague, Dr. Franziska Buriánek, Senior Medical Director at Immunic, presented data from our positive Phase 1b clinical trial of IMU-856 in patients with celiac disease during a moderated poster session. IMU-856 is an orally available and systemically acting small molecule modulator of the target SIRT6.

The trial results gathered during periods of gluten-free diet and gluten challenge demonstrated positive effects for IMU-856 over placebo in four key dimensions of celiac disease pathophysiology, protection of the gut architecture, improvement of patient symptoms, biomarker response and enhancement of nutrient absorption. IMU-856 was also observed to be safe and well tolerated in this trial.

We believe that this highly encouraging data provides initial clinical proof of concept for an entirely new therapeutic approach to gastrointestinal disorders, but promoting the regeneration of bowel architecture.

Additionally, Dr. Geert D'Haens from Amsterdam University Medical Center presented data from our Phase 2 CALDOSE-1 trial of vidofludimus calcium in ulcerative colitis or UC.

As a reminder, the maintenance phase results from the CALDOSE-1 trial demonstrated statistically significant activity of vidofludimus calcium compared to placebo and reaffirmed the drug's favorable safety and tolerability profile. The data mitigated the potential of vidofludimus calcium in UC and other inflammatory bowel disease indications.

Earlier this month, Dr. Buriánek had another opportunity to present the data from our Phase 1b clinical trial of IMU-856 in patients with celiac disease in the virtual e-poster at the Association of European Celiac Society General Assembly conference in Athens, Greece.

That concludes our summary for the third quarter 2023 and subsequent highlights. I'm very happy that the scientific and clinical advancement and progress made across our different programs has been extremely positive during this year.

Immunic has leveraging this momentum now in discussions with pharmaceutical companies. For IMU-856, our goal is to identify a partner who is capable of performing cellular therapeutics Phase 2 clinical trials. For vidofludimus calcium, the release of a very good biomarker NfL data has been an important trigger point for partnering discussions with global and regional pharma players.

I would now like to hand over the call to Glenn to provide financial overview. Glenn?

Thank you, Daniel. I will now review the financial and operating results for the third quarter ended September 30, 2023. Let me start to review of our cash position. We ended the quarter with $59.7 million in cash and cash equivalents. With these funds, we expect to be able to fund operations into September of 2024.

Regarding the operating results, R&D expenses were $19.8 million for the three months ended September 30, 2023, as compared to $16.5 million for the three months ended September 30, 2022. These costs were mainly driven by external development costs related to the ongoing clinical trials of vidofludimus calcium and personnel expenses. This was partially offset by a decrease in external development costs related to the IMU-935 and IMU-856 programs.

The nine months ended September 30, 2023, R&D expenses were $63.9 million as compared to $50.5 million for the same period ended September 30, 2022. These costs were mainly driven by external development costs related to the ongoing clinical trials of vidofludimus calcium, IMU-856 and personnel expenses. This was partially offset by a decrease in external development costs related to the Phase 2 clinical trial of vidofludimus calcium in ulcerative colitis and IMU-935 program.

G&A expenses were $3.8 million for the three months ended September 30, 2023, as compared to $3.6 million for the same period ended September 30, 2022. The slight increase was spread across numerous categories.

For the nine months ended September 30, 2023, G&A expenses were $11.9 million as compared to $11.6 million for the same period ended September 30, 2022. The increase was related to an increase across numerous categories, which was partially offset by a decrease in personnel expense related to stock compensation expense.

Other income was $0.8 million for the three months ended September 30, 2023, as compared to negative $1.1 million for the same period ended September 30, 2022. The increase was primarily attributable to a decrease in foreign exchange losses and an increase in interest income as a result of higher interest rates. This was partially offset by a decrease in R&D tax incentives as a result of less spend for clinical trials in Australia.

For the nine months ended September 30, 2023. Other income was $3.8 million as compared to negative $1.8 million for the same period ended September 30, 2022. The increase was primarily attributable to an increase in interest income as a result of higher interest rates, a decrease in foreign exchange losses and a research allowance attributable for tax year 2021 from the German Federal Ministry of Finance that was received in 2023. The increase was partially offset by a decrease in R&D tax incentives as a result of less and for clinical trials in Australia.

The net loss for the three months ended September 30, 2023, was approximately $22.8 million or $0.51 per basic and diluted share based on approximately 44.6 million weighted average common shares outstanding compared to a net loss of approximately $21.2 million or $0.69 per basic and diluted share based on approximately 30.6 million weighted average common shares outstanding, the same period ended September 30, 2022.

Net loss for the nine months ended September 30, 2023 was approximately $72 million or $1.63 per basic and diluted share based on 44.2 million weighted average common shares outstanding compared to a net loss of approximately $63.9 million or $2.16 per basic and diluted share based on 29.7 million weighted average common shares outstanding for the same period ended September 30, 2022.

With that, I will turn the call back over to Daniel for a review of our upcoming clinical milestones. Daniel?

Yeah, thank you. Thank you, Glenn. I would like to provide an update on the anticipated upcoming milestones for our clinical development programs. Our current expectation is to report top-line data from our Phase 2 CALLIPER trial in progressive MS in April '25.

Additionally, we expect to report an interim futility analysis of our Phase 3 ENSURE programs late next year to read out the first of our identical twin Phase 3 ENSURE trials in relapsing MS at the end of 2025.

As stated before, based on the strong clinical activity observed so far and vidofludimus calcium solidly established safety and tolerability profile to date, we believe that the design of the Phase 3 ENSURE program will provide a straightforward path to potential regulatory approval in relapsing MS.

If topline clinical data continues to show neuroprotective effects for PMS patients, we may be able to position vidofludimus calcium as the first oral treatment for non-active secondary progressive MS as well. We also expect the drug's potential first-in-class ability to activate Nurr1 to meaningfully benefit the ongoing Phase 3 ENSURE trials in relapsing MS.

With regards to our IMU-856 program, as previously reported, we have begun preparing for a Phase 2 clinical trial in ongoing active celiac disease patients. We are very excited about this data and believe IMU-856 could represent an entirely new therapeutic approach for gastrointestinal disorders while promoting the regeneration of bowel architecture with all the serious consequences associated with immunosuppressive therapies.

This brings us to the end of our formal presentation. Jessica, please open the call for the Q&A session.

Yeah, thank you, Daniel and also Glenn for walking us through the third quarter and subsequent highlights as well as our upcoming value inflection points.

We will now begin the question-and-answer session. (Operator Instructions)

Caroline Pocher, Wedbush PacGrow.

Hi, good morning. This is Caroline on for Andreas. Thank you for taking our questions. Just a few from us. Can you provide any insight into where you are in terms of preparing for the Phase 2 trial for 856 in celiac disease? What do you anticipate the trial design would look like and the timelines for when do you think you would initiate the trial?

Yeah, I think as we have stated before, we have fully evaluated the data, done our homework on completion the data packages. So this is work in progress right now.

And maybe some thoughts on the trial design. So likely this should be a treatment phase of three months of treatment in ongoing active celiac disease patients. So a trial which also make it possible to really conclude data for further testing down the road in pivotal trials. And [more or less], that's where we are, and we're still in the preparation process.

Okay, great. And then just one follow-up from us. Can you talk about how enrollment is progressing in the ENSURE program and what your target timeline is to complete enrollment?

Yeah, I think as you know, we usually don't give a rolling update on the recruitment status. And we keep currently our guidance of completion of enrollment and whether we are able to read out the first of the ENSURE studies end of '25 and the second one in a couple of months later. So that's all I can say.

Okay, great. Thank you so much and congrats on the progress.

Thank you.

Liam Hiester, Piper Sandler.

Hi, I'm calling and asking a question on behalf of Yasmeen Rahimi. Just two questions. So my first one is related to the CALLIPER trial. So what type of data are you expecting to report in April 2025? And what's the bar of success expected for the readout?

Yeah, that's a good question. Because I think we have spoken a lot about is really strong NfL data. So of course, we will also report an NfL as a secondary readout from the study. But I think the most interesting endpoints will be the primary endpoint, which is brain volume change in patients comparing active with placebo as a primary endpoint, brain atrophy, maybe that's right word for that.

And another and maybe the most important secondary endpoint or key secondary endpoint is confirmed disability worsening. So a change in EDSS score in a [correct] way. So that also will give us -- and that's, I think is important the ability to correlate the changes in biomarkers and clinical endpoints as well at the same time. And that's all planned to be able to be released in April '25.

Great. Is there a specific bar of success that you're looking for?

If you look on what's currently on the market, I think the bar is not super high here. I think we want to see a benefit on all of the endpoints. But if we more or less translate what we have seen in the NfL dataset into the full data readout that would be wonderful. And also, a meaningful medical difference in disability prevention would be maybe the best thing, the best win here.

Specifically looking on those untreated patient population, so looking specifically on the secondary progressive patients without focal inflammation, without relapses. So the non-active secondary progressive population, I think any benefit here would be great.

And I can't give you real hard numbers here at that point. It will -- I think the study was designed to be powered for brain atrophy benefit. So that there is something we want to achieve on a statistical readout here.

Thank you. And then just one more question, just to build off of that previous one -- well actually in related to that IMU-856. Have you spoken with the FDA at all with Phase 2 design, or is it still just in the preliminary stage?

This is a process which is ongoing right now. So usually what we do is we submit our IND filing and then you have written communication with regulators on, for example, protocol design and so forth.

Great. Thank you.

Matt Kaplan, Ladenburg Thalmann.

Hey, good morning, guys, and thanks for taking the questions. I just wanted to focus a little bit on your business development goals you mentioned during the prepared remarks. Can you talk a little bit more about that for 856 and also [858]?

Yeah, thank you, Matt, and thank you for that question. Of course, here we have several good assets and good data. So you remember this year was full of good data readouts with the celiac data, with the CALDOSE maintenance data and now with the CALLIPER data. And all of these data typically are good points to intensify discussions with companies.

It's difficult to really say exactly what comes first, what is the best option, but I think what we are trying is to make sure we use the data in our active discussions to really build a level of trust and a good discussion with potential partners. And based on that to execute the one or the other deal.

So I think the best description would be that we are building more optionality on that and to have also access to some non-dilutive financing sources to fuel the rest of the pipeline based on that.

Okay, thanks. And then you mentioned in terms of some new IP. What is the new IP that was allowed -- what does that get you in terms of exclusivity period?

Yeah, I think that's a good point. So that patent runs until '38. So there's a patent which covers the dose strength and the treatment of relapsing MS. And it's covered the certain dose strengths here and would protect us until '38, plus patent term extension. But there's a potential patent term extension which was then protect us into the '41. No, I mixed it up, I think this patent goes to --

'41, of course.

'41, yeah, sorry. So '41 is the right number here. And we have more things in the making so that's why.

Okay, great. And then the -- you've been characterizing the vidofludimus as well in terms of its ability to be a Nurr1 activator. What does that mean point of view of the drug as well?

Yeah. I'm very thankful for this question because that's may be the maybe the elephant in the room on the MS treatment landscape. I think the thing is that so far in MS we have good options to treat relapses on the one hand, and we have very good drugs in doing that and reducing inflammation.

What is maybe the missing piece is really to protect neurons from impairment from cell death by triggers and signals which are independent of focal inflammation. So something which for example, is happening patients once they progress from relapsing MS into secondary progressive MS, where relapses go down, but still disability is there.

And with the data we have obtained and in combination with literature data and what other groups have done in the scientific community, we believe that Nurr1 is a target, which may give us here a protective signal for neurons in a way which is independent of that focal inflammation.

And combining the Nurr1 activation with our known and well reported DHODH inhibition, I think this drug has a kind of like a doublet strike on the two important pieces for treating relapses, relapsing MS here on inflammation and direct neuroprotection.

Whereas it also offers now -- and this was I think the conclusion we draw from the NfL reduction, also offers a treatment option for those -- so far untreatable patients of PMS, specifically primary progressive and non-active secondary progressive in this.

And just to be clear, this is something that's totally separate from the DHODH inhibiting effects and not unique to vidofludimus and not characteristic of other DHODH?

No, it's not. Exactly it's not linked to the DHODH. It's something which is a property of the molecule and its binding ability to both, to DHODH on one hand and Nurr1 on the other hand.

We have published a paper earlier this year, together with our academic collaborators around [Denial luwark] showing that the drug directly binds, there's an ICT in this paper showing that the molecule is directly binding to Nurr1 and as a protein.

Perfect. Great. Thanks, Daniel.

Pleasure

Thank you, Matt. And maybe to follow up on Matt's question regarding BD. We received two questions here in writing via the Q&A tool which go into a similar direction. And the first one, please describe your strategy for maintaining adequate liquidity to see these opportunities through to fruition.

And the second one, great clinical results. What's the plan to raise cash? Maybe, Daniel, if you can give your strategic thoughts here again.

Yeah, of course, that's an important piece to make sure we earn the fruits at the end of the day. And therefore, we think it's worth to follow different ways to fund the company for the next years. And as I said, one of the important pieces could be business development activity, partnering one of the assets or maybe even two or some territorial partnerships that also be an option.

Another option is kind of non-dilutive financing, for example, from project financing, and the third one could be any kind of equity financing. So I think we keep those options on the table, but also considering what's going on in the capital markets.

Tom Smith, Leerink Partners.

Hey, guys, good morning. Thanks for taking the questions, good morning. I was just wondering if there's any update on the early pipeline programs like IMU-381? And do you have any visibility on timing for advancing this program into the clinic or on when we can expect to lend more on this asset?

Yeah. Thank you, Tom, for the question. I think the program was initiated based on positive data we generated from the CALDOSE trial. But clearly the company is prioritizing now the clinical programs right now for time and resource reasons.

So we have all the preparation work ongoing, part of that completed. But clearly, the results were close and the progress of the company is focusing on performing next steps and continuing the trial for the vidofludimus calcium and 856 right now.

Got it, that's helpful. And if I could just follow up on an earlier question, just on the 856 celiac study. Are there any specific gating factors, Daniel, that you would call out, I guess in terms of getting that program off the ground and getting the IND cleared and starting to enroll patients there?

As mentioned, we are preparing the trial, that means also physically preparing the trial on materials side. So production of materials for the trials and so forth. And we have also stated that our priority will be celiac disease as first indication that we trying to look at.

But it's also a little bit linked to the other question, we have already today is that we also think about partnering could make sense to also broaden development beyond celiac disease. So this is something which is also an important aspect to consider in any priorities, speed going forward and so forth with the program.

So far, it is still all in preparation. Also, the interaction with the regulators, and this is not just limited to the US. It goes also into European regulators to really make sure we have a good trial prepared. Also discussing with our KOL network on the different aspects of having a good trial set up to make sure we readout proper data, we don't fall on our own feet here.

You can learn a lot from other trials in that world of celiac disease treatments. So I think it's going forward. And as soon as we are making the next steps, I think we will update the market on that.

Understood. That makes sense. Al right, thanks for taking the question.

Thank you, Tom.

Thank you, Tom. (Operator Instructions)

[Mayank Montani] B. Riley.

Hi. This is actually [William Wood] for Mayank today. Congratulations on the really nice third quarter results. I think just one from us on your NfL data from CALLIPER. It looks really, really nice. You've got really nice data across all subpopulations, including the broader PMS population.

We're curious certainly about on the active SPMS. I've got a pretty low-end there. And I'm just curious how we should think about the smaller number there. But then also when we're doing -- when we get to the final readout, will you be looking at the subpopulations and trying to figure out exactly your path forward?

Potentially choosing one subset and over the other then going into the Phase 3 or 4, or potentially for partnering activities, are you really trying to keep this as a PMS more of a broader drug? Just trying to figure out your path forward there. Appreciate it.

Thank you for the question. I think it's not something important we should touch on because I think this is what is the track towards any regulatory approval and how do we prioritize things. I think we were been very excited specifically on the data for the, as I mentioned, for the non-active population, which is really one of the PPMS population and the non-active secondary progressive populations.

The active populations have responded very nicely to NfL, but I think in the US, in the space of the FDA regulated treatments, they fall into RMS basically. So therefore, if we focus on US treatments, this is covered by our ENSURE study basically.

And therefore, if you focus on PMS, we will mainly discuss and go forward with those patients when there is little or no relapse activity remaining. By the way, this was (inuadible) you mentioned the subpopulation of active patients that also reconfirms what we have seen in the EMPhASIS Phase 2 study on those patients. So I think it's also a nice confirmation of their RMS population that we have generated earlier.

But if it comes to the best indication going forward, I think we definitely need to and want to pick the best choice for regulatory approval. And I think this is more or less dictated by two things by our data and the unmet need. And I think this clearly is in non-active secondary progressive, where is no real treatment available right now for patients.

And our data was so good there as well as on the NfL side that we think it is likely that the indication of choice. Of course, we first want to look on the data in April '25 to see if you see the same clinical signals as we have seen on the NfL readout.

I appreciate it. It's very helpful and congratulations again.

Thank you, Will.

Thank you.

Yeah, this actually concludes our question-and-answer session. I would like to turn the conference back over Daniel for any closing remarks.

Yeah. Thanks, Jessica, and thank you, today's attendees, for your insightful questions. In summary, with a completion of enrollment of our Phase 2 CALLIPER trial, the positive interim data from the CALLIPER trial as well as the continuation of enrollment of the ENSURE Phase 3 trial.

We have continued to make tangible progress on the clinical development of vidofludimus calcium during this past quarter. As progress is made, we also expect to provide an update on our preparations for a Phase 2 clinical trial of IMU-856 in patients with ongoing active celiac disease.

With that, I would like to close today's call. Thank you very much for joining, and we are happy to answer any additional questions one-on-one.

Thank you for joining Immunic's third quarter 2023 earnings call. The call has now concluded. You may now disconnect.