IMV Inc (IMV) 2022 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the IMV Second Quarter 2022 Earnings Call. (Operator Instructions) Please be advised that today's conference is being recorded.

I would now like to turn the conference over to Brittany Davison, Head of Finance at IMV.

Thank you, operator, and good morning, everyone. I'm pleased to welcome you to IMV's second quarter 2022 clinical and operational update conference call. I'm joined today by Andrew Hall, our CEO; and Dr. Jeremy Graff, our Chief Scientific Officer.

During this call, we will discuss our business outlook and make forward-looking statements. Any forward-looking statements made today are pursuant to and within the meaning of safe harbor provisions of applicable securities laws. These comments are based on current expectations of management regarding future events and operating performance and should not be seen as guarantees of future performance or results. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks are discussed in our continuous disclosure documents filed in compliance with applicable securities law in Canada and the United States. The press release, MD&A, and financial statements have all been posted on our website at imv-inc.com. If you wish to receive a copy of these documents, please do not hesitate to contact us.

Please note that we will only take questions from sell-side analysts. I will now turn the call over to Andrew to provide an overview of our recent highlights and progress. Andrew?

Thank you, Brittany, and welcome, everyone to the IMV Q2 2022 operational update. I'll begin today's call with an overview of our business, our near-term clinical milestones and a refresh on our execution focus and strategic plan to ensure cash optimization. Jeremy will then provide additional color on our clinical programs and Brittany will provide an overview of the financial results for the second quarter ended June 30. I will then wrap up before we take questions.

I would like to begin the call by restating our strategic priorities as these inform near-term significant value-creating milestones. We are accelerating Maveropepimut towards registration trials by completing Phase IIb clinical proof-of-concept studies that will validate, A, that the DPX delivery platform uniquely makes vaccines in oncology viable; and B, that Maveropepimut-S has a derisked path to registration in DLBCL and ovarian cancer. We have already demonstrated clinical benefit in DLBCL, ovarian and metastatic bladder cancer with Maveropepimut-S. These promising results now require the robustness of a company-sponsored FDA-endorsed multi-centered Phase IIb study.

In quarter 3 of this year, we will provide the first insight into these data with an early look at the VITALIZE study in DLBCL. In the first half of next year, we expect to complete enrollment of the first stage of this study and then 6 months following, we will also complete enrollment of the first stage of our Phase IIb ovarian cancer trial, AVALON.

In summary, in the next 12 months, we will complete enrollment and provide preliminary data at the first stage of 2 Phase IIb FDA-endorsed multi-centered company-sponsored trials.

Strategic priority #2 is the DPX platform. We are investing in the scientific foundation of IMV, the DPX technology, to drive platform-based business development opportunities. The IMV research focus is to confirm that DPX technologies overcome many of the drivers of previous failures in the area of immuno-oncology. In a moment, Jeremy will give more details about the capability of our technology platform compared to other cancer vaccines and how the first results of our clinical trials should validate the broad applicability of DPX and create excitement about our delivery platform amongst the industry.

Executing on our clinical and BD milestones in the context of the current market conditions is the right two-pronged strategy. We recognize that we have a finite amount of capital resources and are prudently allocating capital to those opportunities that have the greatest value-creating potential. At the same time, we have been carefully eliminating nonstrategic spend.

Having initiated enrollment in the VITALIZE trial earlier this year, we now have sites in the EU, North America, New Zealand and Australia. These additional sites have bolstered the pace of enrollment, and we remain on track to give the first results on early patients in the third quarter of this year. We will also plan to complete enrollment of Stage 1 in the first half of 2023. Regarding AVALON, our Phase IIb trial for women with platinum-resistant ovarian cancer, I am pleased to announce today that we have dosed our first patient, and we are targeting enrollment completion of Stage 1 in the summer of 2023.

Based on the data presented at AACR in April, and discussions we've had with thought leadership, we believe the results are a compelling opportunity for Maveropepimut-S in patients with advanced metastatic bladder cancer. However, for financial prudence, we will not pursue a bladder program alone and are seeking partners who have expertise in this space to advance the program whilst delivering the right economics to IMV.

Finally, our clinical study in non-muscle invasive bladder cancer evaluating Maveropepimut-S and the dual-targeted DPX-SurMAGE continues to progress rapidly through recruitment. This study aims to confirm the versatility of our platform to safely deliver multiple targets in a durable and effective way; a feature of DPX that is extremely informative to business development conversations we are having. We expect to have preliminary results from this study by the end of the year with the Maveropepimut-S arm, and in the first half of 2023, with the DPX-SurMAGE.

Now I'm turning the call over to Jeremy to provide an overview of our scientific and clinical programs. Jeremy?

Thank you, Andrew, and good morning, everyone. I want to spend a few moments reviewing our clinical program, the basis for our clinical trials, what we expect to learn from each and the progress we've made in Q2.

First and foremost, our clinical trials. Our lead indication, as you well know, is the relapsed/refractory diffuse large B-cell lymphoma space. Here we're combining Maveropepimut-S with pembrolizumab and low-dose intermittent cyclophosphamide. This enthusiasm is based upon the SPiReL Phase IIa study, wherein we showed a 75% response rate in PD-L1+ patients. That eye-popping number demands confirmation. We are now confirming in the VITALIZE Phase IIb trial, where we will extend on the SPiReL data, but now in a multinational, multi-center way. I'll remind you, this is an open-label study. So we're able to see data as the data come in. With early results, we expect to be able to report that by the end of Q3.

We're very pleased to announce this quarter that we have secured as our principal investigator, Dr. Matthew Matasar, from Memorial Sloan Kettering Cancer Center. I'm also very pleased to announce that we are enrolling patients in a very accelerated way. We have begun enrolling, in fact, in 3 different countries and have activated in a handful of additional countries. This allows enrollment to accelerate. This allows us to live up to what we projected for the end of the year: enrolling most, if not all, of the Stage 1 VITALIZE trial.

The second indication, as Andrew indicated before, is the platinum-resistant ovarian cancer space. This trial is different in that we are only combining Maveropepimut-S as a single immunotherapeutic agent with low-dose intermittent cyclophosphamide. Our enthusiasm is based upon a Phase IIa study, DeCidE, that closed last August.

We saw a benefit across multiple clinical measures, including response rate, median overall survival, OS rates or overall survival rates at 2 years. That allowed us very quickly to work with the panel of exceptional KOLs to devise what we now call AVALON, the Phase IIb study in platinum-resistant patients. This is a Simon's 2 stage design. It is an open-label trial again, and so we will be able to understand what the data look like as they roll in. We're very pleased that our principal investigator for this trial is Dr. Oliver Dorigo from Stanford University. Dr. Dorigo has long been an advocate for our therapy. He has been deeply involved in our ovarian cancer trials to date. And as Andrew indicated as well, we are pleased to announce the first patient has enrolled and is dosing on the AVALON study.

The last registration-oriented efficacy trial that we'll talk about is the metastatic bladder cancer trial. This came from a basket trial wherein we combined Maveropepimut-S, pembrolizumab, and low-dose intermittent cyclophosphamide. We did this in many different tumor types. And while we saw activity and clinical benefit across multiple tumor types, the activity was most obvious and eye-popping in the metastatic bladder cancer cohort. What we saw in this cohort were complete responses that were durable out beyond 600 days, even in patients who had progressed on prior immune checkpoint inhibitor therapy. That's really remarkable.

In addition, the data showed us that we saw responses not just in patients with lymph node metastases but also in patients with much harder-to-treat liver metastases. This now presents for us an opportunity to seek multiple registration opportunities across the entire bladder cancer treatment landscape. As Andrew indicated, we will be seeking a partner to finance and drive these opportunities.

Let's go to the next slide, please. The second grouping of trials that we have in our clinical program are neoadjuvant clinical studies. Neoadjuvant clinical studies present for us an opportunity to interrogate tissue, both the pre-treatment tumor tissue and tumor tissue after- or on-treatment. Getting these tumor biopsy samples is extraordinarily valuable to us as we seek to validate the molecular and cellular proof-of-concept for our molecule.

We have a study in breast cancer, in hormone, receptor positive, HER2-negative breast cancer patients with our partners at Providence Cancer Center in Portland, Oregon. In this study, we will be combining Maveropepimut-S and the aromatase inhibitor, letrozole. The first patient -- in fact, the first half of the first cohort has enrolled and all of them are beyond surgical resection, meaning we have the payers of tumor tissue to begin to interrogate. We have begun interrogating that, and we have submitted abstracts to upcoming scientific conferences, both SITC and San Antonio Breast.

The second neoadjuvant trial in a similar way is also designed to allow us to interrogate pre- and on-treatment tissue, but this is in the non-muscle invasive bladder cancer setting or in NMIBC. We are doing this with our partners at the CHUQ in Quebec. The first patients have enrolled on the first cohort of this study. That is a cohort treated singularly with Maveropepimut-S. Preliminary data, we expect to be able to present perhaps next year's ASCO GU at the beginning of the year.

Importantly, the second cohort of this study will allow us to begin to understand the activity and the safety for our second clinical product, DPX-SurMAGE. This product is designed to inspire an immune response to 2 different cancer antigens, survivin and MAGE-A9 simultaneously. It helps us not only interrogate this new clinical product, but it helps provide the basis for understanding the entire reach of the DPX platform. So we're looking very much forward to being able to verify that dual-targeted activity in the clinic across the next few months.

Let's go to the next slide, please. The last bit that I'd like to review is really based upon our platform. As Andrew said, we are adamantly interested in engaging multiple strategic partners around the platform, a platform that we think is really revolutionary and may allow cancer vaccines for the first time to truly be effective. As we look at the historical cancer vaccine efforts, we can recognize deficiencies that have existed. And I think primarily, those deficiencies include the fact that those formulations could not in a single formulation package the information to educate a specific response, in most cases, those were peptides or antigens, as well as specific activators of the immune system.

In addition, those formulations were incapable of protecting this immune-educating cargo, allowing that cargo after injection to leach into surrounding tissues and ultimately even systemic circulation that limits the ability of the immune system to appropriately interact with that specific information. DPX is different. It is an immune-educating technology that in a single platform, in a single formulation can package a wide variety of cargo. We package the educators for the immune response, the antigens -- whether those antigens are peptides, messenger RNAs, whole proteins or virus-like particles with very specific activators of the innate immune system and the other components of the anticancer immune response, including pattern recognition receptor agonists like poly(dI-dC), perhaps like STING like CpGs.

This is a very unique chemistry, a lipid-in-oil formulation, unique to IMV. As an oil-based formulation, this DPX packaging allows for that cargo to remain at the site of injection for a protracted period of time. It prevents the leaching of that cargo into tissue. As a consequence, it can only be actively consumed and trafficked by the very specific immune cells of the immune system that take that cargo to the lymph nodes to educate an immune response as the immune system is used to doing. It's much more physiologically relevant.

Our lead product -- our lead DPX product -- is Maveropepimut-S. Maveropepimut-S with the depth in the clinical studies that we've achieved so far is an exemplar for this game-changing plug-and-play technology. Maveropepimut-S was born from the in-licensing of peptides originally designed and originally developed by Merck KGaA.

In conventional formulations, those peptides were not very effective at eliciting a robust survival specific immune response and failed to show clinical benefit. In the DPX platform, those very same peptides now show clinical benefit in multiple cancer types, both hematologic and solid cancers. They show that in concert with survivin-specific immunity that can persist out beyond 2 years. We reported in multiple indications, and we've just reviewed that we see complete and durable responses in both DLBCL and bladder cancers. We see durable partial responses in very long-term stable disease as well in those cancers and in advanced ovarian cancers.

These are the data that help us appreciate exactly what the potential for the DPX platform may be, and we're very much looking forward to leveraging that potential as we cascade through the rest of the year.

With that, I will turn the presentation over to our Head of Finance, Brittany Davison.

Thank you, Jeremy. As reported, during the second quarter of 2022, we incurred a net loss and comprehensive loss of $9.9 million or $0.12 per share, which compares to a net loss of $7.4 million or $0.11 per share for the 3 months ended June 30, 2021. The loss increase is mainly driven by an increase of $1.2 million in G&A expenses and $800,000 in R&D expenses as we execute our Phase IIb trials in DLBCL and advanced ovarian cancer. The increase in R&D expenses of $800,000 can be further explained by cost for the vitalized Phase IIb trial in DLBCL as we continue to activate sites globally in order to accelerate enrollment.

This increase was partly offset by a decrease in cost for the basket trial following completion of enrollment in 2021. The increase in G&A expenses in Q2 2022 is mainly driven by an increase in headcount and executive leadership changes as well as loan interest associated with our non-dilutive debt with Horizon Technology Finance Corporation. As of June 30, 2022, the company had cash and cash equivalents of $31.1 million, and cash used in operations in the first half of the year was $16.9 million. Sources of cash from financing activities included the drawdown of the remaining $10 million under our debt facility with Horizon, which was made available following the activation of our AVALON Phase IIb study in ovarian cancer.

As a reminder, this debt is interest-only until January 2024, and this can be extended to mid-2024 upon meeting a second predetermined clinical milestone. As we don't expect to incur significant manufacturing costs in the back half of the year, we continue to expect that our cash position will be sufficient to fund operations through our near-term milestones and into the second quarter of 2023.

I will now pass it back to Andrew for wrap up and to start the Q&A.

Thanks, Brittany. The expected news flow for the second half of this year and into 2023 as summarized on this slide. As you can see, this is an exciting time for IMV and we believe that the company is in the best position it ever has been from a clinical foundational science and biotech-specific expertise perspective. The team here is executing on the timely clinical validation of Maveropepimut-S, where the data from ongoing studies in DLBCL and ovarian cancer will set us on a path for registration trials. We are also seeking to further leverage the value of our DPX technology to create new therapeutics through strategic collaborations, all of which will drive near-term shareholder value.

I thank you for your time this morning, and, Jason, we'll now pass back to you to take questions.

(Operator Instructions) And our first question comes from the line of Jo Pantginis of H.C. Wainwright & Co, LLC.

First, I want to start with a two-pronged question on the bladder program. So first, with the first look of bladder data coming up relatively soon. Maybe, Jeremy, can you remind us the level of data that will be shared beyond potential responses? And then the second part is, with regard to BD, which you've been quite clear about for moving forward, how much of this NMIBC data would be sort of required to inform getting a partnership over the finish line?

I'll touch on the second question first and then let Jeremy talk about the sort of sequencing and planning in the way we disclose our bladder data. So the non-muscle invasive bladder data is both the SurMAGE product and the Maveropepimut-S sort of -- I wouldn't say direct comparison, but we're looking at the two of them to understand what the DPX capacity to carry dual targets is, and in a clinical setting, what it means from some pull-through from availability of targeting system. It's informative in a way that, I guess, is kind of straightforward when you think about it, that is, if you need to deliver multiple targets, there has been a historical challenge for platforms such as ours to do that. And with the trend towards new antigen type targets where we understand that there is going to be a reclined for multiple targets, having clinical validation for that's really important.

I'm not saying it's the rate limit. I want to make sure that that's not clear -- that is clear, sorry. But it is certainly an element of our platform that we believe is differentiating and a set of clinical data to validate that differentiation is something we really look forward to collecting. With respect to the bladder data, I might have Jeremy just comment on sort of the disclosure we have done so far and then how we expect that to carry forward.

Yes, Joe, I'll make sure I've got the question correct. So you're interested in what we may be doing with the metastatic bladder cancer data going forward?

No, sorry. What you're going to be doing for the MBPS and SurMAGE study with the preliminary results by the end of 2022.

Okay. So Andrew was addressing that. I think for us, what those really help us understand and help provide definitive evidence for is how well these products work in a clinical setting. Getting the pre- and on-treatment tumor tissue becomes critically important for us because now we can see in a good, solid set of samples that we are executing in immunobiology that we expect, and then it tracks with efficacy. In that setting, the efficacy will be read out through pathologic response. So ideally, the reduction in tumor cellularity on time. These are early-stage patients. So you're not looking at efficacy in the context of standard RECIST criteria necessarily nor on long-term benefit like survival.

And if I could just end with just 2 quick relatively quick logistical questions. First, on the financial side, obviously, you mentioned -- and you've been very thoughtful about your spend. Are there any other nonstrategic spend that we could look to see removed to further enhance your financial thoughtfulness? And then lastly, with regard to AVALON, with looking to complete enrollment in summer of 2023, would you define any of the rate-limiting steps around that being competitor influences?

2 excellent questions. The first one, I'll take, and then I'll pass the second to Jeremy. With respect to the elimination of nonstrategic spend, we have really aligned the organization up, Joe, to be exclusively focused on 2 things. And that is get the clinical trials done -- my team knows this because I bark it at them every day -- get the clinical trials done, and make sure that we are building a science to enable collaborations and business development. The way in which we've sort of organized the organization around those 2 strategic priorities has been really profound in the way we're driving efficiency.

There is always an opportunity to turn the organization even more strategically and even more limited. And obviously, with a finite amount of resources, there is an evaluation of how we balance investment versus putting things on pause. Where we sit today -- and I think Brittany covered it nicely in the scripted part of the presentation -- we know that we can get through our milestones that we believe are value creating with the cash we have on hand. We don't believe that's a risk. But if there is a way to further optimize the organization around milestones that we may be creating, that's something we're always open to. And so you will see from our financials that our cash burn has become more efficient, even though doing Phase IIb studies, which, as you know, are not inexpensive, but the sort of cash optimization, I'll call it, of this organization is pivotal to our strategy. And that's something we're very closely monitoring and continuing to evaluate. And Jeremy, I'll have you answer the question on…

On the AVALON trial and the carryforward. So we expect, as we've just begun AVALON with our first patient in-treatment this week, to really drive that forward all the way through to next summer. The rate-limiting step, I think, is what you're asking for, for us to progress beyond that. That obviously always includes our data and what our data are teaching us relative to what the competition in that space may be. We're specifically in a platinum-resistant patient population. So we're calling in on that population because there are very limited options for those patients that have already crossed the line from an FDA perspective.

So we always factor in what else is going on in the field, and we rely heavily on our KOLs to help us not only see what current state is when we devise the trial, but to anticipate future state. And in the ovarian cancer space, in particular, we really have an incredible roster of KOLs. These are literally the top people on the planet doing cancer or ovarian cancer treatment.

So we're very excited about the AVALON trial because it really is an opportunity to power up and show what Maveropepimut-S can provide to women who need a safe alternative. We don't want to go back on the carousel of chemo poisons that create toxicities.

And Joe, just to jump on the back of Jeremy's comment with respect to the competitive environment, driving our confidence around recruitment and our confidence around delivering on the time line. In the conversations we're having with our clinical sites, the profile of Maveropepimut-S is tremendously different to other things going forward in ovarian cancer. And that balance of durable benefit that we've seen from the DeCidE trial and that benefit being well tolerated by patients, even in those patients that were not getting RECIST-defined response, is something that is very appealing from a clinical perspective and certainly differentiated from what we're seeing of the competitive environment that's evolving around us.

And our next question comes from the line of Brandon Folkes from Cantor Fitzgerald.

Maybe just one final one for me. Just with a lot of data coming over the next couple of months, how should we think about you prioritizing programs going forward? Because a lot of this going to be data-driven in terms of where you may consider what you take forward yourself or to maybe look for a partner at this stage? Or have you sort of set your mind up in terms of which programs would best be suited for a partner based on the data readout in the next maybe 12 months?

Thanks, Brandon. Again, I'll open the question and then maybe hand to Jeremy for some color. So we are going to be data-driven, and it's nice that we're going to be able to be data-driven in the next 12 months. As a reminder, the data we will see, we are seeing as the data comes in live, it is not blinded data. And so as a result of that, we're able to make decisions on the fly with respect to program prioritization, with respect to what we understand to be sort of paths to registration, obviously data as well as trial design is going to inform that.

And so we are very mindful that as we walk through our data sets, and this is a data set in not just ovarian and DLBCL, but also the earlier data sets in non-muscle invasive bladder and also the breast cancer data that we look forward to having some insight into later this year.

All of this informs sort of our thoughtful prioritization of what we believe will be the first indication. We know that there's a defined path to market in both our lead indications. We -- I look at this as not just a race to the finish line, but the one that creates the greatest value for us will be the one that gets prioritized into the pivotal registration type program.

The flip side of this is always that all of this clinical data doesn't just validate the value of Maveropepimut-S, it informs the value of the platform in its entirety. This will be the first time that a non-tumor injected vaccine type therapeutic is demonstrating this type of data against solid and liquid tumors. And that isn't because necessarily of the target. We believe that is because of the platform and its ability to provide an immune response, which is profound enough to drive clinical benefit.

With all of the data that we see -- and this is why we think that the breast and the non-muscle invasive bladder data is equally as important -- by creating those matched biopsy samples, we'll be able to better understand this on mechanism benefit that our platform is driving, and therefore, create momentum to do other targets that people have previously abandoned. And obviously, when we think about the landscape as it generates, the interesting data on KRAS and some of the challenges that are presenting around toxicity, interest again in MUC1 and p53, all of these targets are right at the front of our interest level and obviously brand, and driving our enthusiasm for business development. Jeremy, do you want to add any color on top of that?

Yes, just reaffirm. I think what Brandon asked as well was, will we be data-driven as we prioritize which of all of these clinical opportunities we press the action on the hardest. And the answer is absolutely, yes. And it's our data as it comes in. And as Andrew emphasized, these are from open-label trials, we get to see the data in real time. That helps us anticipate the decisions we're going to take. It's our data, but it's also our data against the backdrop of what's going on in the field. Will our data win relative to other activities going on in these indications, that's the kind of decision the matrix will be playing through as these data mature.

Brandon, does that answer your question?

It does. Yes. Congratulations on all the progress and good luck with the data readout.

Thank you, mate. And again, to reiterate, it's a quarter that IMV is focused enormously on execution. This quarter, the quarter 3, we actually get to see the first read of that execution and an early look at the DLBCL data. The following quarter there is, again, more data in the following quarter. There is, again, more data. We are entering into an extremely data-rich time for IMV, and this is data that will be curated through multinational FDA-endorsed company-sponsored trials that will, I believe, create a momentum for this organization that is profound through the development of clinical support.

On the back of that, I wish everyone a terrific rest of their Thursday. Thank you, Jason, for co-opting this conversation, and it's nice to speak with you all, and I wish you a lovely day.

Thank you, presenters, and this concludes today's conference call. Thank you for participating, and you may now disconnect.