IMV Inc (IMV) 2020 Q4 法說會逐字稿

Good morning, everyone, and welcome to the IMV Inc. Fourth Quarter and Year-End 2020 Conference Call and Webcast. (Operator Instructions) Please note that today's call is being recorded today, Wednesday, March 17, 2021, at 8 a.m. Eastern Daylight Time.

I would like to now turn the call over to Mr. Labbé, Mr. Pierre Labbé, Chief Financial Officer of IMV Inc. Mr. Labbé, you may begin.

Thank you, Joanne. Good morning, ladies and gentlemen. My name is Pierre Labbé, Chief Financial Officer at IMV. I'm pleased to welcome you to our year-end 2020 clinical, operational and financial results conference call.

I'm joined today on this call by Fred Ors, our Chief Executive Officer; and Dr. Joanne Schindler, our Chief Medical Officer; and Andrew Hall, our Chief Business Officer. Fred will begin with a reminder of the company's opportunity, then Joanne will present the clinical highlights, followed by Andrew on the commercial opportunity with our lead product, and I will conclude with a financial overview. Fred will briefly conclude, and we will have a Q&A session at the end of the presentation.

Before we begin, I would like to remind you that except for historical information, this audio and webcast presentation contain forward-looking statements, which reflects IMV's current expectations about future events. These forward-looking statements involve known and unknown risks and uncertainties that could cause IMV's actual results to differ materially from these statements.

These 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 made on this call are based on several assumptions which may prove incorrect, and they represent views only as at the date of this call 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 our current annual information form as well as our audited annual consolidated financial statements, which are available on SEDAR and on EDGAR.

The press release, the MD&A and the consolidated financial statements and our most recent annual information form are also all available on IMV's website at the imv-inc.com. If you wish to receive a copy of either of these documents, please do not hesitate to contact us. Finally, take note that we will take questions only from sell-side analysts.

I will now turn the call over to Fred. Fred?

Thank you, Pierre, and good morning, everyone. I hope you and your families are all doing well. And I'm very pleased today to have the opportunity to share our progress and the steps we have ahead of our pipeline development in 2021 and beyond.

Looking back at the extraordinary year that was 2020, I would like to start first by saying thank you to all our employees and partners for their commitment to continue to provide our immunotherapy cancer patients with high unmet medical needs and will continue to require new options of treatment. In this challenging time, we have made significant progress in our programs, delivering some of the best results in the industry for T cell therapy in cancer. And more than ever, we remain committed to our goal of making our treatment available to patients with a sense of urgency and audacity, but always based on the most robust science.

In that respect, I'm really proud today to share with you the generic name of our first product, Maveropepimut-S, formerly known as DPX-Survivac. Not only this new name underline the audacity of our science, but it is also a stepping stone for us on our path to market.

We see 2021 as a transformational year for IMV as we continue to expand the development into multiple cancer immunotherapies. We have so far demonstrated clinical activity not in just one, but in four different late-stage cancer indication, and this in both solid and liquid tumors, and both had monotherapy and in combination with a checkpoint inhibitor.

In 2021, we are advancing Maveropepimut in 3 clinical trials. And we will initiate a Phase I trial with DPX-SurMAGE, our new dual-targeted T cell therapy. We believe that our T-cell therapy has the potential to become a backbone of immunotherapy for cancer as a single treatment in different lines of setting and with a broad range of possibilities for combination. And I don't have the time this morning to go through all the details of the slide that we have in the deck supporting this statement, but let me just highlight 2 income points.

First, on Slide 8. In cancer, it is the dose that makes the treatment. It has always been the case for drug development, and it is not different for T cell therapy. We are the first to bring a solution to this. With our technology, we are able to generate a therapeutic dose of T cells in the blood of patients and sustain it over an extended period of time and that makes a world of difference. And this is why we have produced some of the best results in the industry because of this mechanism of action.

Second, on Slide 9. Clinical activity is required for sure, but it is not sufficient in today's highly competitive environment. We not only have clinical efficacy, but we also have a product profile that is overcoming the most important challenges for immunotherapy, which are a very favorable tolerability profile combined with duration of clinical benefits as well as ease of care and cost effectiveness. We believe that all these elements together will be important for the future of medicine and that we are uniquely positioned.

I'm now turning the call over to Joanne. Joanne?

Thank you, Fred, and good morning, everyone. I'm going to start with an update on the SPiReL study. This is an investigator-initiated, Phase II study evaluating Maveropepimut-S and low-dose cyclophosphamide, or CPA, in combination with Merck's anti-PD-1 checkpoint inhibitor, Keytruda in DLBCL.

Last November, at the Annual Meeting of The Society for Immunotherapy of Cancer, or SITC, lead investigator, Dr. Neil Berinstein and his colleagues from the Odette Cancer Centre at Sunnybrook Health Sciences Center in Toronto, reported they had identified PD-L1 as a potential biomarker of clinical response in patients with relapsed or refractory DLBCL in this combination trial. In December 2020, at the annual meeting of the American Society of Hematology, or ASH, Dr. Berinstein showed in the population of evaluable subjects that had PD-L1-positive tumors an overall response rate and a disease control rate at both 85.7% with 3 of these subjects completing 1 year of study treatment.

Overall, the treatment was well tolerated. The majority of treatment-related adverse events were grade 1 and 2, of which the most common were injection site reactions associated with the subcutaneous administration of Maveropepimut-S. Additionally, peripheral blood was assessed for survivin-specific T cell responses as measured by ELISpot. All 3 subjects with a complete response and 3 of 4 subjects with a partial response had positive responses, while only 1 subject with a best response of stable disease and 1 with progressive disease demonstrated a survivin-specific T cell response. This data suggests an association between the clinical responses with the mechanism of action of Maveropepimut-S.

On the strength of these promising results, we engage with the U.S. Food and Drug Administration, the FDA, to pursue the evaluation of the combination therapy in patients with DLBCL. We recently received valuable and productive feedback from the FDA. And together with our partner, we're now in the process of finalizing the design for our next study and expect to initiate the trial in the next quarter. We'll provide more details once the design is final.

Moving on now to the basket trial on Slide 13. The objective of this exploratory trial conducted in collaboration with Merck is to identify and select the best solid tumor opportunities for the combination of Maveropepimut-S with Keytruda and low-dose cyclophosphamide. Recruitment in 5 cancer indications follows a Simon 2-stage design, and each indication has prespecified success thresholds defined by the expected effect of Keytruda as a monotherapy agent in each of the indications. 116 subjects have been enrolled across the different arms.

As shown in the figure on Slide 14, we have reached stage 1 criteria with sufficient data in 4 out of the 5 indications. In 2 indications, ovarian cancer and non-small cell lung cancer, the prespecified criteria were not met and accrual has been stopped. In the liver cancer cohort, we have yet to enroll enough subjects to have sufficient data to make a determination. However, we will be adjusting some of the eligibility criteria in order to accelerate enrollment rates in this indication.

We are pleased to announce that the combination therapy achieved the thresholds in 2 indications, metastatic bladder and MSI-high tumor cancers. These cohorts continue to accrue as we further evaluate the potential of the combination therapy in both these cancer types. This is promising data, and it helps us to further define and broaden our prospective pipeline in oncology.

With that, I'll move on now to the recent results of the DeCidE Phase II study evaluating the safety and efficacy of Maveropepimut-S with intermittent low-dose cyclophosphamide in late-stage ovarian cancer. As we speak today, we've completed enrollment for the study, and one patient remains on treatment for extended dosing. In December 2020, we presented top line data showing long-lasting clinical benefit with an excellent safety profile in patients with advanced platinum-sensitive or platinum-resistant refractory disease. These data support our claim that Maveropepimut-S is amongst the first in vivo targeted T cell immunotherapies demonstrating clinically meaningful activity in hard-to-treat solid tumor.

Currently, we're analyzing the translational data from this trial with the goal of better understanding the mechanism of action of Maveropepimut-S and identifying potential predictive biomarkers. Once the analysis is completed, we'll request a meeting with the FDA in the second half of the year to discuss the data set and finalize the design for a Phase b -- Phase IIb trial.

To complete my review of our oncology program, I'll now comment on the upcoming DPX-SurMAGE Phase I clinical trial, which is a collaboration with the Research Centre of Québec, Laval University and aims to develop a novel dual-target T cell therapy with an initial clinical application in bladder cancer. More specifically, we'll be combining immunogenic peptides from the MAGE protein family that are frequently expressed in various human cancers, including bladder, lung and kidney, with selected immunogenic peptides from the survivin protein composing our Maveropepimut-S drug candidate. The DPX-SurMAGE program will begin with first-in-human study in patients with nonmuscle-invasive bladder cancer. The design of the trial is being finalized, and we'll communicate further details as we target to start in the second half of this year.

To conclude our clinical pipeline, a few words on our DPX-COVID-19 program. Due to the evolution of the regulatory landscape, the emergence of new variants and the approval of vaccine in different areas of the world, the company is conducting complementary preclinical studies, including evaluating the impact of new variants. These studies are ongoing. There still remains outstanding questions about the duration of the protection induced by the current and soon-to-be-approved vaccines, their efficacy against emerging variants and the possible need to revaccinate. There's growing awareness among experts that the rollout of the newly approved vaccines is not going to bring an end to the pandemic overnight. And the suppression of the virus is going to take a multipronged approach involving different vaccine technologies, possibly over several years.

We continue to believe that our DPX-based vaccines, which offer a unique mechanism of action, may potentially be part of the compelling solution to COVID-19 and to other future pandemics. Our goal is to generate sufficient clinical evidence to support this hypothesis.

As a conclusion, I'd like to emphasize what Fred said earlier. We expect 2021 to be transformational for IMV as we're progressing on the path to registration with our lead compound and broadening our pipeline with new DPX-based immunotherapies for hard-to-treat cancers. I'll return later to answer questions. But before the Q&A, Andrew will give an overview of the commercial opportunity with Maveropepimut-S.

With that, Andrew?

Thank you, Joanne. Good morning, everybody. I wanted to spend just a few minutes this morning walking through the IMV vision of the DLBCL market. So in line with regulatory guidance, our plan is to investigate Maveropepimut-S in combination with Keytruda in late-line patients. This represents a fast-to-market strategy and is now clearly a strategic goal for the company as our first launch opportunity for Maveropepimut-S.

What I'm more interested in sharing with you is the opportunity based on the profile we've seen through the SPiReL study of the balance between efficacy and safety that provides this product in combination with Keytruda the opportunity to progress to earlier lines of therapy and potentially to move towards an opportunity in maintenance within this disease space. As is clear from the epi in DLBCL, any movement out of third line creates a significant commercial opportunity, one that we look forward to exploring as we progress this product forward towards market.

I'd also like to spend just a minute to remind everyone of the unique value that Maveropepimut-S presents as a novel therapy for oncology. Fred touched on some of these points earlier, but I think it is worth reminding everyone that with a unique mechanism of action, there is potential to be synergistic with other immunotherapies in oncology. We've demonstrated that in the -- sorry, in the SPiReL study in DLBCL with Keytruda. We have also demonstrated positivity in the basket study that Joanne just illustrated, but the mechanistic synergy doesn't need to end there. And because of the favorable safety and tolerability profile that we've demonstrated, both in our monotherapy trials as well as our trial in combination with Keytruda, we are confident that the opportunity to combine this therapy with other immune therapies will be part of the life-cycle management plan for Maveropepimut-S.

I would also like to remind everyone that this is a subcutaneous administration that can be stored at room temperature with an extended shelf life that enables broad utility without the complications that we know some therapies in oncology present. And finally, this is relatively easy to make and extremely cost-effective. In a world where therapies for oncology are creating price points that are significant, this presents IMV with the unique opportunity to potentially disrupt the market on a pricing strategy. Clearly, our clinical data will need to read out for us to inform that strategy. But I think it is important to remind everyone that the uniqueness of this product profile goes far beyond just the clinical data set that we have demonstrated so far.

With that as a brief commercial snapshot, I look forward to taking questions later, but I'll pass the call to Pierre, who will walk through the financial side.

Thank you, Andrew. Before I start, I just want to remind you that all the numbers that I will be discussing are in Canadian dollars. So for 2020, our R&D expenses were at $26.6 million, an increase of $7.6 million over 2019. This $7.6 million increase is mainly due to a rise in expenses related to the ongoing basket trial, the personnel cost due to an increase in headcount and preclinical development of our DPX-COVID-19 vaccine candidate.

The R&D expenses for the development of our DPX-COVID-19 were offset by a new government assistance. The government assistance totaled $6.7 million in 2020. It's an increase of $4.2 million compared to 2019. And as I just mentioned, the increase is mainly explained by the various government grants that we received for the development of our DPX-COVID-19 candidate.

The G&A expenses were $15.2 million for 2020 compared with $10.1 million in 2019. And the increase is mainly attributable to higher insurance premium for $2.7 million through an increase of $1.3 million in foreign exchange loss and an increase of $0.7 million in noncash DSU compensation. The net loss and comprehensive loss was $34.9 million or $0.58 per share for 2020 compared to $27.4 million or $0.55 per share for 2019.

As of December 31, 2020, the company had cash and cash equivalents of $46.4 million compared to $14.1 million at the end of 2019. And based on our current operating plan, actual cash is expected to fund operations for the next 12 months.

Cash and cash equivalents increased by $32.3 million in 2020. We used $34.8 million of cash in our operating activity and $0.4 million in investing activity. At the same time, our financing activities generated $67.5 million. The cash generated by financing activities came primarily from the $25.1 million private placement that we completed in May 2020 and by the gross proceeds of nearly $41 million from the At-The-Market facilities that we had in place and by $2.3 million coming from the exercise of common share warrants.

As of March 16, 2021, the number of issued and outstanding common shares was 67.7 million. And a total of 5 million stock options, DSUs and warrants were outstanding at that date. Finally, and as mentioned in the introduction, the corporation's audited annual consolidated results of operations, financial condition and cash flows for the year ended December 31, 2020, and the-related management discussion and analysis are available on SEDAR, on EDGAR and on the company's website as well.

So thanks for your attention. And I will now turn the call back over to Fred for his closing comments before the Q&A session. Fred?

Thank you, Pierre. I hope you all appreciated the significant progress IMV realized on multiple fronts in 2020, especially the compelling data we presented at the end of the year in our oncology program in both DLBCL and ovarian cancer. In addition to that, we also achieved significant financial and operational milestones, including welcoming new key employees and directors, such as Andrew Hall as Chief Business Officer, we are very happy to have him onboard; and have as a Director Michael Bailey, who is the President and CEO of AVEO Oncology, which we -- which just recently got FDA approval in renal cell carcinoma. Happy to have Michael onboard as well.

Looking ahead of 2021, we anticipate this may turn out being an important point for IMV -- in IMV's evolution as we advance down the registration path and further advance our lead compound, Maveropepimut-S, in relapsed/refractory DLBCL, late-stage ovarian cancer and other solid tumor indication while we will continue to expand our pipeline -- sorry, to include our first dual-targeted T cell therapy in bladder cancer. We continue making progress unlocking the full potential of our platform, DPX, in our quest to deliver effective, tolerable and easy-to-handle immunotherapies to patients with hard-to-treat cancers. We are grateful for the continued support of all our stakeholders, partners, shareholders and employees.

Thank you for your attention. Operator, we now are ready to take questions.

(Operator Instructions) Your first question comes from the line of Tom Shrader from BTIG.

Congratulations on all the progress. You're going to need a nickname for that drug. But I have a PD-L1 question that I really want to ask twice. In DLBCL, do you have a cutoff? And do you measure it by some sort of biopsy of the lymphoma mass? Or is it all B cells? Is it tumor microenvironment? What exactly are you measuring? And are the rules kind of the same as a solid tumor where the cutoffs are either 1% or 50%? I know it's harder to measure.

Joanne, you want to take that one, please?

Yes. Thanks for the question. And yes, we might need a nickname there. So for the PD-L1, yes, we do look at the tumor tissue. And for now as we're trying to better understand where we might set a cutoff, we don't have one at this point in time that's specific, we would look throughout the tumor. So we'll look at the tumor cells. We'll look at the microenvironment as well to better understand that so that we can set this in the future.

Okay. And really the same question for the non-small cell cohort that didn't work. I mean people are kind of finding that to add to PD-1, you really have to find a place where PD-1 works well. So were all those patients significantly PD-L1 positive in that cohort?

So this is Joanne again. That is information that we're pulling in now. So we'll have more information about that in the future. As you can imagine, a lot of data set that we need to go through to better understand these results.

Your next question comes from the line of Joe Pantginis from H.C. Wainwright.

I'm going to start towards the back end of the call with Andrew's comments and his comment that Maveropepimut-S is easy to make. And I just like -- wanted to focus on that because that is very powerful, I believe. But I want to translate the comment to your new assets and the ease or plug-and-play nature to make dual antigens like SurMAGE and additional ones going forward. So just wanted to see how it's translatable to additional assets.

I will start. Andrew, and then maybe you can complement. Thanks for this question, Joe. It's, I think, a very important point for this technology and for us as a company. Survivin is the first asset we are developing, and we're really, like I said in my introduction, are generating one of the best results in T cell therapy. But the way we are looking at this technology is exactly in line with what you were just saying.

We have done some demonstration that we could combine a very high number of different targets in one formulation. I think we went up to 30 targets at some point. So it's a very flexible technology, and that is very cost-effective, like you were just saying that, truly giving us this flexibility and opportunity to venture into targeting cancer from multiple angles that could potentially work together in making a very strong T cell therapy.

And this is really where we see the blue sky and the future of this technology going. And SurMAGE is really the first -- we're going to provide the first clinical look at the benefit of combining 2 different attacks on a tumor with 2 different targets that could act with complementarity. Andrew, I don't know if you want to add on that?

Thank you, Fred, and thanks, Joe, for the question. So to get back to the point of manufacturing simplicity, but from an economics perspective, manufacturing cost, because of the relatively -- and I don't want to belittle the process because there is a lot of technological know-how that goes into it. But because of the relatively straightforward process and the relatively inexpensive process of combining the DPX technology with the therapeutic targets that we've investigated so far, we do have a, really, what I consider to be unique ability in this market to make some interesting commercial choices with respect to market disruption on our entrance strategy.

And so your point is very well made, Joe, that we believe this is one of the advantages of the DPX technology as it relates to Maveropepimut-S. But we also recognize that, that advantage can be carried through all of our pipeline and potentially beyond the peptide targets that we've so far identified in our pipeline.

Got it. And I guess a separate question maybe for Joanne. When you look at the basket cancer -- the basket study, excuse me, and you look at the liver cohort, obviously, just curious if you could take some broad strokes or even specific strokes regarding the adjusting enrollment criteria.

Thanks for the question. So for the liver cancer cohort, one of the things that was holding us back was eligibility criteria. We were probably a little too conservative as it related to hepatitis B and C. And so we will be broadening that, and that will allow us to enroll more patients.

(Operator Instructions) Your next question comes from the line of Paul Stewardson from IA Capital Markets.

Just calling for Chelsea. In terms of the ovarian cancer strategy, can you give us a bit of a directional sense of how close it came to the success threshold in the basket trial? And in terms of -- would you consider other combinations? Or is this -- how does this relate to the monotherapy? Where you can go from here in the different combo possibilities?

Thanks for your question. The basket trial, the goal of the basket trial was really to explore where the combination between our T cell therapy and a checkpoint inhibitor, in that case, pembrolizumab or Keytruda would really make a difference. So we set up ambitious objectives in all those indications. And we very carefully selected indications from ovarian, where pembrolizumab has very limited activity; to bladder in MSI-high, where there is more activity. And the idea was really to better understand where we should focus the development of the combination.

So for us, the fact that it didn't meet the threshold for ovarian, in a way, it's not too surprising given it was one of the indication in that basket that -- where pembro had limited activity. And also you have to consider that PD-L1 expression, generally speaking, in ovarian cancer is pretty low.

So what it tells us, and I think Andrew highlighted that, and I did too in my introduction, that we have a T cell therapy that has a very favorable safety profile. And the number of combination we can do with this technology, because we are not having toxicity, is very broad. And what -- you can start -- we are starting to conclude from the number of clinical studies we've done now is that there are indications where it can be applied as monotherapy, and there is no value adding a checkpoint inhibitor. There might be value adding another type of treatment. And there are other indications where clearly the combination of the checkpoint inhibitor and the T cell therapy is making a big difference, like DLBCL, potentially MSI and bladder. And that's where we want to focus the combination with checkpoint inhibitors. For all the indications, we'll go as single agent or we'll combine with other type of treatment.

Okay. And just kind of a quick follow-up. Do you have a sense of time line for when we'll start to see kind of more comprehensive data from the basket trial in terms of interim results?

What we'd like -- what we want to do is really, like Joanne was saying, there's so many considerations you have to integrate before you make a decision to pursue a combination like this in a solid tumor. And it's not only the objective response rate, obviously, but you have to look at the duration. You have to look at the PD-L1 expression. You have to look at whether those patients previously received checkpoint inhibitors or not.

And we don't want to necessarily rush into another potential registration trial even we are advancing DLBCL and ovarian. And we really want to take the time to make the right decision with our partner, Merck, on that case to where we should focus the development in solid tumors. So it's difficult for us to provide guidance exactly on when we'll be positioned to make a publication. We'd like to publish the results rather than providing interim results piece by piece. But when we reach enough compelling evidence that there is a very strong rationale, for example, to select 1 or 2 indications and move them into the next trial, that's where we will update the market and publish the results.

Your next question comes from the line of Andre Uddin from Mackie Research Capital.

Fred, maybe you could just give us, if you don't mind, a business development update and where are you in terms of out licensing? I know pharma always has some check boxes that they have to see. If you could just provide some color on BD, that would be great.

Andre, thanks for the question. I will let Andrew answer that one. Andrew?

Thanks, Fred, and thanks, Andre, for the question. As far as where we are at, we are in the exploratory mode. We have, I believe, 4 unique pillars for business development opportunity. Clearly, there's a licensing collaboration opportunity for the in-clinic products. We have a relationship with Merck, that we look forward to exploring and developing in DLBCL, for Maveropepimut-S. We obviously are bringing forward SurMAGE into clinic, and we look forward to proving that product both in monotherapy and potentially in combination therapies. If it sounds like this is an advertisement for business development, perhaps it is.

But also, we recognize that our platform of DPX technology can go far and beyond the targets that we have in our own pipeline. And so I think that there is a very fertile ground for business development. I will say that since joining IMV, we've evolved our both appetite and strategic skill set to that end goal significantly. And I would hope that through 2021, we can communicate materiality in our business development strategy as it relates to collaborations and partnerships.

There are no further questions at this time. I turn the call back over to presenters.

Thank you. We don't have any more comments. So we'd like to thank you all for your time this morning.

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