IMV Inc (IMV) 2018 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to IMV's Third Quarter 2018 Earnings Conference Call. (Operator Instructions)

I'd now like to introduce your host for today's conference, Pierre Labbe, CFO of IMV. Please go ahead.

Thank you, James. Thank you, everyone, for joining us today for our conference call. I'm Pierre Labbe, CFO at IMV. And joining me on the call today is Fred Ors, our CEO; and also during the Q&A session, Dr. Gabriela Nicola Rosu, our Chief Medical Officer; and Marianne Stanford, our VP Research, will be available to answer your questions.

Before we begin, I would like to remind you that except for historical information, this presentation contains forward-looking statements, which reflects IMV's current expectations regarding future events.

These forward-looking statements involve known and unknown risks and uncertainties that could cause IMV's actual results to differ materially from those statements. Those risks and uncertainties include, but are not limited to, our ability to access capital, the successful and timely completion of clinical trials, the receipt of all regulatory approvals and other risks detailed from time to time in our ongoing quarterly filings and annual information form.

The forward-looking statements in this presentation are also based on a number of assumptions, which may prove to be incorrect. Forward-looking statements contained in this presentation represent views only as of the date of this presentation and are presented for the purpose of assisting potential investors in understanding IMV's business and may not be appropriate for other purposes.

IMV does not undertake to update forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation.

Investors are cautioned not to rely on these forward-looking statements and are encouraged to read IMV's continuous disclosure documents, including its current annual information form as well as its audited annual consolidated financial statements, which are available on SEDAR at www.SEDAR.com and on EDGAR at www.sec.gov/edgar.

I will now turn the call over to Fred Ors, our CEO. Fred?

Thanks, Pierre. Good morning, and thank you all for joining us today. I will start with a brief update on our clinical programs and other business highlights, and then I will hand it back to Pierre to review our financial results.

We have made good progress with several of our clinical programs in this quarter. In mid-September, we announced early positive results from an ongoing investigator-sponsored Phase II clinical trial of our lead candidate, DPX-Survivac, in combination with low-dose cyclophosphamide and Merck's checkpoint inhibitor Keytruda in patients with persistent or recurrence refractory diffuse large B-cell lymphoma or DLBCL.

The preliminary data included assessment of 50 and clinical activity for our first 4 available patients, who completed their first CT scan after the start of treatment. The data showed that 3 of the first 4 available participants had tumor regressions at the first on-treatment CT scan. The first enrolled participant demonstrated a tumor regression of 48%; the second demonstrated a partial response, with tumor regression of 66%; and the third demonstrated stable disease with a 5% tumor regression. The other participant had early disease progression less than 2 months following treatment initiation and was discontinued from the study.

The safety profile of the combination therapy appears to have an acceptable safety profile, with no serious adverse events reported to date. The data, we believe, is very promising, and we are encouraged by these early results and the signs of clinical activities that we see in DLBCL. The trial is expected to enroll 25 participants with DLBCL expression surviving a tumor antigen expressed in approximately 60% of these DLBCL patients.

The study's primary endpoint is to document the objective response. The secondary objective includes measuring tumor regression and documenting toxicity profile and durations of response.

Early in September, the company also announced that IMV had expanded its clinical programs with the collaboration with Merck in the Phase II basket trial to evaluate DPX-Survivac in combination with low-dose cyclophosphamide and Keytruda in patients with select advanced or recurrent solid tumors across 5 solid tumor indications. The open label multi-center Phase II study will evaluate the safety and efficacy of the combination in patients with bladder, liver, ovarian or non-small cell lung cancer, NSCLC, as well as tumors shown to be positive for the microsatellite instability-high, MSI-high biomarker.

We are planning enroll up to more than 200 patients across those 5 indications at multiple medical centers in Canada and the United States. IMV expects to initiate trial enrollment in the fourth quarter of 2018.

In August, we -- in the collaboration with Incyte, our enrollment was completed for the Phase Ib cohort in the advanced ovarian cancer clinical trial, and the first patient was dosed in the Phase II portion of the program.

We have completed enrollment in the Phase Ib, with a total of 53 patients across the 2 dosing groups in the study. And the Phase Ib study, the remainder is evaluating the safety and efficacy of combining DPX-Survivac with epacadostat at 100 [or] 300 milligram dose and this with low-dose cyclophosphamide. This is in individuals with advanced platinum-sensitive and resistant ovarian cancer. Top line data from the Phase Ib is expected to be announced in the first quarter of this year.

We plan to enroll up to 32 patients in the Phase II cohort, which will evaluate DPX-Survivac and low-dose cyclophosphamide with or without epacadostat in patients with advanced recurrent ovarian cancer. And the goal of this Phase II program is to evaluate the clinical contribution of each drug, DPX-Survivac and -- in combination with cyclophosphamide versus the combination with epacadostat.

As a reminder, earlier this year, we announced positive data from the Phase Ib dosing arm in an oral presentation at the 2018 meeting of the American Society of Clinical Oncology, or ASCO, and the data showed that DPX-Survivac generated surviving specific T cell responses in 100% or 10 out of 10 evaluated patients. Patients with T cell infiltration showed partial responses with significant and durable tumor regressions, lasting more than 1 year at the time of the data cutoff and still ongoing. This analyzes from this first dosing cohort established for the first time in a clinical trial a correlation between partial tumor regressions and surviving specific tumor T cell infiltration generated by DPX-Survivac.

To our knowledge, it is also the first demonstration that a targeted T cell therapy can generate significant tumor shrinkages in a solid tumor. So we are very encouraged by what this demonstration means for the potential of our technology. And when you combine the activity of DPX-Survivac, the long duration of responses and the absence of systemic toxicity, DPX-Survivac really stands out as a very unique value proposition for patients.

With that as a clinical update, I will now ask Pierre to review our financial results for the third quarter. Pierre?

Thanks, Fred. Please keep in mind that all the numbers that I will be discussing are in Canadian dollars. The net loss for the third quarter was $6 million, or $0.14 per share. The R&D expenses in the quarter increased by $2.6 million to $3.9 million as for the 3-month period ended September 30, 2018, compared to 2017. These increases primarily reflect the 2 new Phase II clinical trials in collaboration with Merck in ovarian and DLBCL, which started in 2018 and also costs related to the preparation of the basket trial.

G&A expenses of $1.9 million increased by $981,000 for the 3 months period ended September 30, 2018, compared to 2017. These increases are mainly explained by an increase of $353,000 in stock-based and deferred share unit compensation, the increase in insurance premium following the Nasdaq listing for $167,000, nonrecurring expenses related to the relocation to our new facility for $86,000, and increase in legal, audit and consulting fees.

For the 9 months -- for the first 9 months of 2018, IMV's cash burn rate was $11.9 million. Based on the current business plan, we forecast the cash burn rate to be between $4 million to $4.5 million in the last quarter of 2018, depending on timing of certain clinical expenses. As of September 30, 2018, the company had cash and cash equivalents of $20.3 million compared to $15 million as of December 31, 2017.

We estimate the company to be well funded with cash until Q4 of 2019. As of today, the number of issued and outstanding common shares is 44.9 million and 46.9 million shares on a fully diluted basis.

I will now turn the call back over to Fred for his closing comments. Fred?

Thanks, Pierre. As you can see, we were quite busy in the third quarter. In summary, we now have 8 Phase II combination trials ongoing in 6 cancer indications through the company's collaborations with Incyte and Merck and, importantly, the company has successfully kept all rights on its lead clinical asset, DPX-Survivac, with no first right of refusal. I also want to remind you that we also have an arm ongoing as monotherapy as part of the future trial. We are doing it with Incyte, and we are quite excited about this arm as well. There are very few new agents in immunotherapy that have shown monotherapy or single-agent activity, and we are very excited about this. We are pleased to -- that we reached important milestones across several of our development programs. Our results in ovarian cancer have consistently demonstrated that how our proprietary T cell technology can generate tumor regression in solid tumors. An important goal of the company is to provide patients with more effective treatment options, which we are doing by expanding our clinical program to include other hard-to-treat and underserved cancer indications.

Although early, we are very encouraged by the initial activity we're seeing with DPX-Survivac in combination with Merck's Keytruda in blood cancer like DLBCL, where our checkpoint inhibitors alone have shown only modest anticancer activity so far.

We anticipate continued progress over the next year, and we expect to report the following: top line data from the higher-dosing cohort in the clinical trial with Incyte; top line data from the triple combination Phase II trial with Merck in DLBCL; initial data from second triple combination Phase II trial with Merck in ovarian cancer; and preliminary data from the Phase II basket trial in collaboration with Merck in those multiple solid tumor indications.

We look forward to [meeting] you on these ongoing events. Thank you for being on the call this morning. Operator, we are now ready to take questions.

(Operator Instructions) Our first question comes from Endri Leno with National Bank.

A couple of questions for me. First, I just wanted to clarify a little bit the time line for the ovarian cancer trial with Incyte. Which data are you reporting in the fourth quarter that was referred to in the press release?

It's the top line data on the 53 patients that have been enrolled across the 2 different doses of epacadostat.

Okay. And it's got to be for both doses, 100 and 300 milligrams?

Right.

Okay. Next question, just how is the enrollment going for the Merck basket trial?

The Merck basket trial is -- so we said that we would initiate enrollment in the last quarter. So we will -- as soon as we have the first patient enrolled, like we've always been -- like we have always done, we'll issue a press release. And -- but we have a significant number of sites lined up, so we expect to have good enrollment for this trial.

Okay. And next question for me, and I'll get back on the queue before I follow up with something else, but you had -- on the presentations on the website, you mentioned a potential meeting with the FDA for an acceleration trial in Q1 2019. Have you booked this meeting with the FDA yet? Or is it still in the works?

It's still in the work, but this meeting is going to happen, so we are very confident we're going to have this meeting before the end of the year.

Okay, the meeting is going to be before the end of the year?

Yes. The goal, Endri, is to present the top line results that we were discussing in your first question.

Our next question comes from Carol Werther with Dawson James.

I was just wondering if you can discuss with us what would be the result -- or a good result that we were looking at, at ESMO I-O?

Well, I think that we already had provided very good results in the sense that this trial is the first efficacy trial with DPX-Survivac. A major objective of the trail was, first, to prove to make the clinical demonstration that with this technology, and again I will repeat it, we believe for the first time ever, we can make a demonstration that we can trigger significant regressions of solid tumors. And we believe it's the first in the space that targeted T cell therapy lead to those type of regressions. I don't believe that the CAR-T and CR technologies have made this demonstration yet. So we are very excited and very impressed by what we have seen in the first cohort. And for us, the top line result is really confirming what we have seen. And like I was referring earlier in the answer from Endri is being able to present this data to the FDA and being able to design a path to registration for DPX-Survivac that, hopefully, would be an accelerated path.

(Operator Instructions) Our next question comes from Doug Loe with Echelon Wealth Partners.

A couple of things for me, one on DPX-Survivac and then one on other things. I wondered if you maybe just kind of go through some of the key points and rationale on the solid tumors that you've selected to incorporate into the basket study. I assume that a lot of the rationale was just based on target markets for Keytruda or markets where it's actively advancing in Phase III itself independent of DPX-Survivac's relevance in those cancer markets. But I just wondered, is there any relevance to levels of surviving expression or PD-1 and PD-L1 expression? Just any sort of biochemical rationale that might be -- might give us some sense of which of those cancer markers might preferentially see activity over others? So that's the first thing. And then second of all is, most of your commentary was, obviously, DPX-Survivac focused, but you, of course, have long pipeline of DPX formulations with other partners, including the HPV program with Dana-Farber and the cattle vaccine program with Leidos -- or sorry, the malarial program with Leidos, cancer vaccine program with Zoetis. So I just wondered if there are any other key events that we should be looking for from your partnered pipeline that could be germane to your clinical activities over the next, say, 3 to 4 quarters? And I'll leave it there.

Thank you, Doug. So on your first question, I think you highlighted the main criteria that were used to select those indications. So -- it was a combination of, where are the best opportunities for the DPX-Survivac, so a combination of having indications where surviving has been documented to be highly expressed and playing an important role for a specific indication and the market opportunity in terms of size, but also in terms of where is the unmet medical need and what can we expect DPX-Survivac could have to Keytruda in some of the markets where Keytruda is already proved. And just a final consideration that if you look at the range of indication that we have, you will notice that we were able to -- in discussion with Merck, to go across a very different spectrum of activity for Keytruda, which was important for us in the sense that it's really our most extensive clinical trial with Keytruda, and we're wanting to get a sense when the benefit could be higher. So if you look at the response rate, for example, in ovarian versus the response rate in MSI-high with Keytruda, those are very different type of solid tumor indication. And we believe that information from this first trial is going to be very key for us for the future development of DPX-Survivac in combination with Keytruda, but also in combination with any other checkpoint inhibitors that we might combine with in the future. The second question was on the other products that IMV is developing in collaboration with partners. So just as a reminder, we said that in our business plan, our goal is to focus on the development of DPX-Survivac. It doesn't mean that we are not open to exploring other use of our platform with partners and we have a number of ongoing collaborations with Dana Farber, Leidos and some others. The way we are approaching those collaborations and program is that before -- we want to see no evidence that, that is a very strong business case in any of those collaborations before communicating on it. In essence, those programs are exploratory programs. And we do expect, to answer your question, that some of those programs will deliver results. Whether the company will decide to communicate on this result will depend on -- if there is a clear path forward that we can articulate and a project that we can talk about depending on the results.

Our next question comes from Ted Tenthoff with Piper Jaffray.

I apologize if this question was asked, but I joined the conference a little bit late. With respect to the data coming up in December, about how many patients should that be?

Yes, it's 53. 53 patients have been enrolled in the trial. And so we're going to report on those 53 patients.

Great. Good update. And I feel really excited to hear more about the solid tumor basket study. I think that's a really interesting program.

And we do have a follow-up from Endri Leno with National Bank.

Just a quick question for me. For the data on the Q4, the 53 patients, is there any, I mean, sort of specific date or date range? Are you presenting them at any conferences or when you're done analyzing them?

So we have been accepted to present a poster at conference called ESMO immuno-oncology. It's in Geneva from December 13 to 16. So you can expect that the data will be published at that time.

And with that, I show no further questions in queue, so I'd like to close today's conference with a very kind thank you for everybody to join. We do thank you for your participation. And you may now disconnect. Have a wonderful day.

Thank you.

Thank you.

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Thank you.