Immunic Inc (IMUX) 2022 Q1 法說會逐字稿

Good morning, and welcome to Immunic's first quarter 2022 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 recently promoted Chief Financial Officer. (Operator Instructions) This event is being recorded. (Operator 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 Dr. Daniel Vitt, our CEO and President, to begin with the presentation. Daniel, please go ahead.

Yes. Thank you, Jessica. I would like to welcome everybody to Immunic's first quarter 2022 earnings call. Earlier this morning, we announced our financial results for the quarter ended March 31, 2022, and highlighted recent activities as well as upcoming milestones related to our clinical development pipeline. During today's call, we will talk through our first quarter 2022 and subsequent highlights, financial and operating results as well as anticipated milestones. As Jessica noted, before we close the call, you will have the opportunity to ask questions.

The first quarter of 2022 was marked by continued advancement (technical difficulty)

My apologies, Daniel. I had to mute you for a second. It seems like the audio had a little problem. Maybe you can restart with the -- with the review of the quarter, please?

No, not working. I'm not sure -- maybe, Glenn, would you like to take over?

Sure. Will do, Jessica. So earlier this morning, we announced our financial results for the quarter ended March 31, 2022, and highlighted recent activities as well upcoming milestones related to our clinical development pipeline. During today’s call, we will walk through our first quarter 2022 and subsequent highlights, financial and operating results, as well as anticipated milestones. As Jessica noted, before we close the call, you have the opportunity to ask questions.

The first quarter of 2022 was marked by continued advancement across the business, including financially and within our key pipeline programs. The progress we have made, as I stated last quarter, is clearing the way for several important data readouts this year that could be transformative for Immunic. Let me walk through the first quarter ’22 and subsequent events in more detail. In February, we presented the preclinical data at the potent anti-inflammatory activity of vidofludimus calcium at the 17th Congress of ECCO. Highlights included: first, vidofludimus calcium reduces pro-inflammatory immune cell responses by inducing regulatory macrophages, reducing pro-inflammatory cytokine secretion and reducing T cell proliferation. Second, vidofludimus calcium shows additive to synergistic effect with anti-TNF antibodies. And finally, that DHODH is important in the fraction cell that receive a strong immune stimulus and are highly metabolically active.

In conjunction with the ECCO Congress, as you may recall, we also announced the blinded baseline characteristics of our Phase II CALDOSE-1 trial of vidofludimus calcium in UC. Patients in the trial had active to moderate severe disease and, as we noted, we were pleased to see that only 17% of the patients were pretreated with biologics. The trial utilized a central independent reader to evaluate the endoscopic eligibility criteria. At baseline, 55% of patients had a modified Mayo endoscopic score of 3, and 45% of patients had a score of 2. As previously noted, we firmly believe that the randomized patient data and the methodology regarding endoscopic assessments used in the trial to contribute to ensuring optimized study readout. We continue to believe that the results of the interim analysis, along with vidofludimus calcium’s already established strong safety and tolerability profile, suggests that the drug could become a preferred oral treatment option for patients suffering from ulcerative colitis and obvious alternatives to biologics.

Moving to our second asset, IMU-935, our potentially best-in-class oral IL-17 inhibitor. In February, we significantly bolstered our intellectual property protection for IMU-935 with the receipt of notice of allowances for composition of matter patents in the U.S., Europe and Australia. These patents provide protection at least to 2038, with further extension possible through the potential PTE in the U.S. or SPC in Europe, respectively.

In March, we promoted Glenn Whaley to our Chief Financial Officer. He has done an outstanding job in 2019. Pleased to have Glenn in this position.

Most recently, we announced the start of the patient cohorts in our ongoing Phase I clinical trial of IMU-856, our third clinical asset, in patients with celiac disease, marking the first time patients will be treated with this orally available small molecule which targets restoration of the intestinal barrier function and regeneration of bowel epithelium. This is an important milestone in the clinical development of this program, as data from preclinical studies have suggested to us that IMU-856 can restore barrier function in the gastrointestinal tract and regenerate intestinal architecture while maintaining immunocompetency.

Moving on to the financial results, let me start with the cash overview. We ended the first quarter with $95.7 million in cash and cash equivalents and then subsequently, in April, we raised an additional $10 million through our at-the-market facility. We anticipate this cash balance to be sufficient to fund operations into the third quarter of 2023.

Regarding the operating results, research and development expenses for the quarter ended March 31, 2022, were $17.4 million, as compared to $11.5 million for the same period in 2021. The increase in costs for the quarter reflect a continued ramp-up of clinical expenses related to our 3 clinical programs, as well as increased personnel expenses related to the hiring of more people to support the company’s growth. The increases were partially offset by decreased costs related to our Phase II clinical trials in COVID-19 and ulcerative colitis and a decrease in drug supply cost for vidofludimus calcium. General and administrative expenses were $4 million for the quarter ended March 31, 2022, as compared to $3.6 million for the same period last year. The increase in costs was primarily due to personnel expenses, as well as smaller increase in costs across numerous categories.

Net loss for the 3 months ended March 31, 2022, was approximately $20.8 million or $0.74 per share, based on approximately 28.1 million weighted average common shares outstanding, compared to a net loss of approximately $34.5 million or $1.63 per share, based on 21.2 million weighted average common shares outstanding for the same period in 2021.

Moving on to -- notably, one of our most important upcoming value inflection points will be the highly anticipated readout of our Phase II CALDOSE-1 trial of vidofludimus calcium in patients with moderate to severe UC, which we previously reported having completed enrollment during the fourth quarter of last year. As a reminder, at the completion of patient recruitment, the trial had randomized a total of 263 patients into 4 arms: 3 active dosing arms of 10, 30 and 45 milligram, as well as placebo.

As for IMU-935, after having previously reported positive unblinded safety PK and PT data from healthy volunteer portions of our ongoing Phase I trial of IMU-935 as planned, we expanded the trial in Q4 ’21 to include a third portion to treat patients with moderate to severe psoriasis. This was a key milestone for us as it represents the first time patients are being treated with this compound. As mentioned in our fourth quarter call, in order to address the COVID-19-related limitations in Australia and New Zealand, where this trial has been exclusively conducted, we have now submitted the required documentation to regulatory authorities in Bulgaria and North Macedonia in order to press forward rapidly with patient randomization. We expect initial results from this third portion of the trial to be available in the second half of this year. The initial data will provide us with a first important look at IMU-935’s safety and efficacy profile in this patient population.

In addition, enrollment in the Phase I dose escalation trial of IMU-935 in progressive metastatic castration-resistant prostate cancer, which was initiated in late Q4 of 2021, has been ongoing. The trial is led by principal investigator Dr. Johann Sebastian de Bono, one of the world’s foremost experts on the subject of CRPC. We are grateful to have Dr. De Bono at the helm of this trial and anticipate that initial safety data will be available in the third quarter of this year. As a reminder, the trial is designed to establish a recommended Phase II dose and to assess safety, tolerability, antitumor activity, biomarkers and pharma kinetics of IMU-935 in this indication.

With regards to our ongoing Phase I clinical trial of IMU-856, with the single ascending dose part already completed and multiple ascending dose currently ongoing, we eagerly anticipate reporting the unblinded safety data from these healthy volunteer parts in the third quarter of 2022. It is also important to note that our twin Phase III trials for vidofludimus calcium, ENSURE-1 and 2, in patients with relapsing multiple sclerosis are progressing. As a reminder, we have targeted an enrollment of approximately 1,050 patients in each trial. Dosing is either 30 milligram once daily of vidofludimus calcium or placebo. The primary endpoint for both trials is time to first relapse up to 72 weeks.

Also ongoing is our supportive Phase II CALLIPER trial in progressive multiple sclerosis, designed to demonstrate vidofludimus calcium’s potential for neuroprotective activity. This trial is expected to enroll approximately 450 patients, randomized to either 45 milligram once daily of vidofludimus calcium or placebo. The primary endpoint is the annualized rate of brain -- percent brain volume change up to 120 weeks. We remain highly enthusiastic about the potential of vidofludimus calcium to become a best-in-class therapeutic for this patient population given its demonstrated activity in preventing lesion formation as shown in our Phase II EMPhASIS in RRMS and its exceptional safety and tolerability profile thus far. Despite the limitations of currently approved therapies, the global MS market exceeds $23 billion, and vidofludimus calcium is uniquely positioned to address the unmet needs for MS patients.

That brings us to the end of this formal presentation. Jessica, please open the call for Q&A.

Yes. Thank you, Glenn. Thank you very much for jumping in here, and apologies again to the audience for the technical issues. That’s what sometimes happens in a digital world. Daniel, do you want to say some closing remarks here for the formal part of the presentation?

Well, I just want to say thank you to Glenn and you to manage that. It's quite a [challenging CEO task]. I redialed in, and I hope that works now for the Q&A session.

Yes, I think what I wanted to add [to the end] of the presentation is that we're really pleased that we will be reading out this number of important clinical trials very soon. And we can do that with a [strict] financial base, decent cash reach as well as we have raised an additional more than $40 million since beginning of this year through our ATM facility.

Yes, and with that, maybe, Jessica, you can open the Q&A session.

Yes, sure. More than happy to do this. (Operator Instructions) All right. Our first question comes from Thomas Smith at SVB Leerink.

Great. Just a couple on our end. I guess first, on the vidofludimus trial in ulcerative colitis, we've seen a number of Phase II readouts over the last few weeks. When you're looking at some of these results, can you just help put your study with vidofludimus into context and remind us what's driving your confidence in success at the top line here in June?

Sure. Happy to do that. I think we really prepared intensively with KOLs the design of the trial, inclusion criteria. And we try to really make sure that the trial is well designed looking on baseline characteristics as mentioned, also making sure that we technically have a good trial ongoing. So far, we are satisfied with what we have seen technically from the trial, so we are very confident that this trial will read out properly. Our confidence on the data -- on positive data comes from a couple of other findings in the past. First of all, you may remember that there was a small interim analysis done after 25% of the patients have been -- have completed the 10-week induction phase.

And the data review committee at that time suggested to continue with all active doses, because none of the dose was expected to be ineffective compared with placebo. This was not done on a statistical assessment, but just from a data review committee perspective. Also, there was prior data from an open-label, small proof-of-concept trial -- the ENTRANCE trial -- in the past showing that the drug may have activity in these indications. So we are quite optimistic and confident that, that works.

Okay. Great. That’s helpful. And then just a couple on IMU-935. First, can you just clarify, have you started dosing psoriasis patients in the part C portion of the study? And then, as you look to expand enrollment here into Eastern Europe and you're opening up the trial sites in Bulgaria and Macedonia, how are you thinking about regional enrollment? Do you expect more patients to come from the Australia/New Zealand region or the Eastern European region?

And then just a final question on how you're thinking about the overall study population. Have you considered opening enrollment to mild to moderate patients, maybe as a way to bolster enrollment in the short term?

Yes, thank you once again. I think good points. So yes, we are recruiting patients right now in the psoriasis portion, and we currently have active recruitment of the low-dose cohort, which is 150 milligram once daily. That’s going on in Australia and New Zealand. As we said, we are in the process of getting Bulgaria and Macedonia up and running. So we submitted the documents, so that’s work in progress. We hope that these countries and centers will be active soon. And coming to the study population, I think, if you look on other trials, you should not spread it too wide, because a reasonable, good activity of psoriasis is required to see a real delta between placebo and active. And therefore we keep it for moderate to severe, which requires, for example, PASI score of 10, minimum, just to make sure we don’t get too much noise in such a trial. So it may be easier to recruit if you include mild patients, but it may destroy your results because of potential placebo activity from the mild patients.

Next guest in our line here today is Yasmeen Rahimi of Piper Sandler.

Maybe the first place to start off is recently we saw another competitor program who missed on their primary endpoint, driven by losing maybe some patients due to the European conflict. So maybe kind of can you kindly ensure us that the number of samples that were analyzed specifically for clinical remission are exactly as you predicted -- there are no lost follow-ups? So let’s start there, then I have a few more.

Sure. I think the good thing is that the 10-week phase, which is the primary endpoint, was completed before the war started in Ukraine, so yes.

Okay. Great. Second question for you is we did also notice that there’s quite a bit of sponsors who have lots of sites ongoing. There’s quite a bit of heterogeneity that could influence the placebo. So, given the CALDOSE study has a very large clinical sites up and running, how can we get confident that there’s not going to be an introduction on site heterogeneity? So just any commentary you could provide us as we head into the top line could be helpful.

That’s true, and I think this was a -- this is a challenge in UC trials for a decade, basically. And we try to really address it by, for example, doing eligibility assessment based on baseline endoscopy screening. So we make that in a central, unbiased fashion just to make sure there is no site bias and no country bias in these things, and I think that’s good. Also, another part of that is, to ensure data integrity, we also implemented a 2-plus-1 reading scheme for the endoscopy. So it’s done in a central fashion, in a double-blind fashion. And 2 independent readers are looking on the endoscopies and, if they don’t come to the same conclusion, there’s a third adjudicator taking care of that. That’s also, interestingly, now a recommendation from the FDA in the new draft paper for UC guidance for Phase III. So I think we did what we can do to make sure there’s not an unwanted noise.

Also, we are stratifying for prior therapies, also stratifying for steroid use, for example. So everything in place to make sure there is no statistical issues here from there.

And then where are we as, obviously, we have, what, maybe 2 and a half, maybe 3 weeks left into June. Can you just give us a quick snapshot on has the data been unblinded yet? What is going to be -- what’s left to do between now and reporting top-line data? And if you feel comfortable to narrow down when in June, whether it’s early June or mid-June or late June, that could be really helpful for us.

Yes, I would love to give you a date, but I can’t do that. So -- and we are still blinded, so I have not seen the blinded data. I should not have this call if I would be unblinded. No, I think it’s June. It’s maybe more likely first half of June, but we keep the guidance for June. Database is still not locked, so that's work in progress. It’s a final signature huntings and cleanup work from the database ongoing right now.

Our next guest is Andreas Argyrides of Wedbush.

Just a quick one from us here, also on CALDOSE-1. So the study’s powered for an 8% to 12% improvement in clinical remission based on an expected placebo response of 5% to 10%. Can you just talk about how you have planned to mitigate the placebo response? Some other trials have seen higher than 5% to 10% in their trials.

I think there are endless discussions on that here, I know. And there may be lot of reasons why, in some trials, placebo rates are higher. What we see as the biggest risk -- and I think it was also repeated by KOLs recently -- is if you allow too much communication, which sometimes has an unpredicted activity on placebo patients. So we don’t allow immunosuppressants as co-therapies, for example. That was seen with some other trials in the past, and they were correlated with a higher risk of placebo rates. The other thing we're doing is just to make sure we have stringent inclusion criteria and we follow our own principles here, and then I think the trial should be comparable to other successful trials...

Next one is Matt Kaplan of Ladenburg Thalmann.

I just wanted to kind of stay with the CALDOSE study a little bit. I guess, given the interim analysis for results that you saw, can you talk about -- a little bit about how you're going to be analyzing the different doses in the study? And should we expect a dose response, given the interim dose that said continue all doses?

Thank you for asking. Welcome to the call. On the doses, I think I had a very strong opinion on that when we started the trial, and in between we read out our wonderful MS data in 2020, where I think 30 and 45 milligrams -- the 2 high-dose groups -- came on almost at the same good activity level. So I can’t tell you really if I believe 45 is the highest active dose. I’m a little bit careful on that end. What we, I think, can deliver here is to identify a suitable dose for Phase III, and we are very lucky that we have 3 active doses in the trial and placebo. So this trial is designed to deliver the answer to the question, what is a suitable dose for Phase III? I think that’s the purpose, and that we likely will deliver.

Yes, so dose responses, that’s -- would be wonderful, but if you look on other trials, it sometimes follows interesting curves.

All right. Great. And then in terms of 856, the Phase I program, it said you're expanding into colitis patients. Can you -- sorry, celiac patients. Can you give us a sense in terms of what to look for there as the data -- potential data reads out, I guess, from the SAD/MAD grouping in the third quarter?

Yes. I think that -- thank you once again. So this is, of course, a big step, because the third program is currently actively recruiting patients in the MAD portion of the healthy volunteer part, so 14-day treatment in the healthy volunteers. And this data, together with the single ascending dose part, is expected to be available in the third quarter of this year. So not too far from now, we should have safety and PK data. (inaudible) was the message here on the celiac disease is we think that celiac disease is a good proof-of-concept indication for a drug which is, without impacting directly the immune system, able to restore the barrier function. And therefore we believe that this is a very good indication for proof of concept.

(Operator Instructions) Next question comes from Boobalan Pachaiyappan at H.C. Wainwright.

So just a follow-up on 856, trying to get an understanding of the biomarkers that you might be evaluating down the road. So are you planning to investigate some histological biomarkers that might require duodenal biopsy, or some less invasive peripheral blood cell and cytokine biomarkers, and also if these biomarkers were de-risked in any of the prior competitors’ trials?

Yes. I think, yes, sure, we will measure also biomarkers in that part of the trial. We will also give more update on the trial itself in a couple of months to come, when we progress to the trial. The idea is really to have an indication where you really have a more synchronized process of barrier function modulation, and to use that strength and also to demonstrate that 856 has the potential to restore barrier function and maybe also -- and it brings us to the histology question -- restore the proper structure here in the gut wall.

Okay, I understand. And one more on this. So you mentioned that -- about -- you will be -- the drug will be evaluated in 28 days, so just curious whether that period is sufficient to gain initial evidence for drug activity. Specifically, can intestine barriers function normalize and bowel epithelium regenerate in 28 days?

Yes. I think, based on the discussions we're having with the experts -- and our team did a very intense work there -- we believe that should be possible in the 28-day time frame.

The last one I currently have in the line here is Brendan Holly of ROTH Capital.

Hi, his is Zegbeh. I’m actually on the line -- thought I wasn't going to make it, but just wanted to ask a couple of quick questions. I’m looking at the blinded baseline characteristics for the CALDOSE study. Is there anything unique about this patient population that we need to be aware of before making any cross-trial comparisons? And are you also going to be stratifying based on baseline disease severity, meaning moderate versus severe, in addition to what you mentioned about stratifying based on steroid use or other factors?

Yes. I looked around, or the team looked around, on other trials, and we found, on the baseline characteristics, maybe the best comparable trial would be the [ozanimod] Phase II trial, which was -- has same level of pretreated patients. Also, severity was comparable. I think that that's maybe the -- from what I have seen as parameters, the best comparator.

And then the next one here is just, again, as we prepare for the first look at clinical data for the psoriasis patients treated with IMU-935, again, what should we be keeping in mind as we think about kind of benchmarking the data that’s coming out again? And then, have you begun active conversations with regulatory bodies in the U.S. and Europe?

With respect to the -- sorry, Zegbeh, to ask -- with respect to the 935 or...

Yes, 935 and psoriasis specifically.

Yes, I think the -- 935 is a wonderful molecule with very unique potent inhibition of IL-17 as an oral drug. So we believe the drug is poised to be a successful drug between currently used oral treatments -- namely here apremilast, I think, is the dominant player there -- and the broadly very successfully used IL-17 pathway antibodies. So if you ask me regarding what can we expect, so we -- the treatment is limited to 4 weeks. Therefore, we can only show 4-week data, and therefore we did -- we said -- we look on reduction of the PASI score. So we will not look on PASI 50, PASI 75. That is something we will do in Phase II. But for the Phase I proof of concept, basically, what we're doing here, we are looking on the PASI reduction. But the good thing is there’s so much data out on other drugs where you can nicely compare this. Typically, if you look on historic trials there, the placebo rates are ranging between 10%, 15%, sometimes up to 20% -- that’s it.

So we think we should see a quite good differentiation already after 4 weeks if we compare here active -- the 2 active doses with the placebo group. And therefore, this trial is really designed to deliver a very strong rationale for a Phase II trial -- which is now bridging to the next question on regulatory discussions. We are currently working on packages for discussions with the FDA, and also with other regulatory bodies, but it’s not yet done. So that’s work in progress.

And then the last one here -- with so many catalysts coming up, it’s easy to forget about the ENSURE and CALLIPER studies, but I was just wondering if you can provide any additional color on progress there with enrollment or site activations?

Well, yes, as you know, we usually don’t give any guidance on updates on enrollment of the trials. We give guidance on how we believe they are running. So the -- and given that ENSURE and CALLIPER started not too long ago, they are still in the start-up mode and phase. They're actively recruiting in several countries. We're adding more countries, more sites, step by step. So that’s progressing. Also, I think -- and you're right, we have so many other things we're currently focusing on and the readouts for the next couple of months that we don’t talk too much about that. But it’s -- as you know, it’s a good opportunity to remind everybody that the drug has shown -- 838 has shown wonderful, good activity in a very big Phase II trial in relapsing MS, and therefore we think, or we continue believing, that the drug is likely successful in the Phase III RMS trials -- the ENSURE trials.

But we were also quite thrilled about the potential in progressive MS, and that’s usually not covered too much in the press and everywhere, but we think that the mode of action and the features we have seen -- and recently added also some data in the context of our [10-K] filings from our second cohort, the 10-milligram dose cohort, that we see a lot of hints that the drug is really neuroprotective and may have a very strong benefit also for progressive patients with PMS there, and so that’s also an important piece we are working on.

All right. I think this was all the questions I have in the list here, so this concludes our question-and-answer session. I would like to turn the conference back over to Daniel for any closing remarks.

Thank you, Jessica. Just need to find them. Yes. Thank you, Jessica, and thanks to today’s attendees for your insightful questions. We are highly enthusiastic about the progress we achieved recently and the important upcoming milestones we anticipate this year, including the Phase II UC data for vidofludimus calcium in June and the initial psoriasis patient data for IMU-935 in the second half of this year. With that, I would like to close today’s call. Thank you very much for joining, and we are very happy to answer any additional questions in one-on-ones. And once again, I apologize for the technical issues we had during this call.

Thank you, Daniel. Also, from my side, thank you for joining Immunic's first quarter 2022 earnings call today. The conference has now concluded. You may now disconnect.