IMV Inc (IMV) 2020 Q2 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the IMV Inc. announced second quarter 2020 financial results and provide corporate update conference call. (Operator Instructions)

I would now like to turn the conference over to your speaker today, Pierre Labbé, Vice President and Chief Financial Officer. Please go ahead.

Thank you, Julie. Good morning, ladies and gentlemen. My name is Pierre Labbé, I'm CFO at IMV. I'm pleased to welcome you to our clinical, operational and financial update for the second quarter of 2020.

I'm joined today by Fred Ors, our CEO; Joanne Schindler, our Chief Medical Officer; and Marianne Stanford, our VP, R&D. Both of whom will be available for the question period.

Fred will begin with an overview of the company's operational highlights, and I will, after that, present the quarter's financial highlights.

Before we begin, I would like to remind you that except for historical information, this audio presentation contains 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 in our 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 of 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 its current annual information form as well as its audited annual consolidated financial statements, which are available on SEDAR and on EDGAR.

The press release, the MD&A and the financial statements are all posted on our website at 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 at the end of the call.

Now I'm turning the call over to Fred. Fred?

Thank you, Pierre, and welcome to our second quarter results call. I'm very pleased to have the opportunity to review IMV's latest realizations, which includes significant strengthening of our financial position, the rapid advancement of our COVID-19 vaccine candidate and very promising updated clinical results in our oncology program.

Starting with our recent realizations around DPX-COVID-19 candidate. We are enthusiastic that Health Canada has recently agreed on our proposed Phase I clinical study design that is including the elderly population. This study is a randomized, controlled study assessing the safety and immunogenicity of DPX-COVID-19 in 84 healthy adults across 2 age cohorts: one with adults aged between 18 to 55, and another one with adults over 56. For each cohort, 2 dose levels will be tested. Enrollment will happen at 2 sites in Canada, and we're expecting to get final approval to initiate vaccination of subjects before the end of the summer.

Our vaccine is a formulation of the DPX platform with 4 complementary peptide antigens selected for their high immunogenicity and ability to bind non-overlapping areas on the virus spike and neutralizing its sensitive function, with the goal to optimize safety and efficacy of COVID-19 vaccination.

It is important to note our selected targets are located outside of the 614 gene mutation, which, according to recent research, has been demonstrated to increase the virus' ability to infect cells in vitro and suggested to potentially reduce vaccine-induced immunity. This means that our vaccine candidate will retain its potential efficacy independently from current or future mutation of the virus at this site as well as at other sites outside of the 4 peptides we have selected.

Our preclinical results have shown that DPX-COVID-19 can induce strong immunogenicity that is superior or equivalent to a clinical industry vaccine against IV that we are using as a reference in all our preclinical studies, and that the immune response is functional with antibodies binding on target to the spike protein and capable of neutralizing the virus.

As we anticipate shortly moving with this Phase I, we've also completed the current manufacturing practice formulation and manufacturing process development to support Phase II and beyond, and this include the successful progression of multiple batches at IMV. We are doing this development in very close collaboration with the Canadian government with supporting our Phase I with about close to $5 million of mobility financing.

Our Phase I preliminary results will become available later this fall, and assuming they are successful, we aim to initiate the Phase II clinical trial shortly thereafter and continuing to set up manufacturing.

To fund these continued initiatives, IMV has already submitted other grant application to relevant authorities and has also engaged in discussions with partners in other countries.

I will now review our most recent results in oncology. At our last quarterly update in mid-May, we announced that SPiReL, the Phase II study of DPX-Survivac combination regimen with Keytruda in patients with relapsed/refractory DLBCL, have met its primary efficacy end point, with 64% of available patients demonstrating a clinical response. We are very pleased by these results. We believe they are one of the best in class in relapsed/refractory DLBCL, comparing very favorably to approved treatments and need therapies in clinical development with respect to efficacy, safety and ease of care. We anticipate presenting top line data at a scientific conference later this year and to engage with the U.S. FDA to identify the path forward for this indication.

In late May, we also gave a poster presentation at the American Society of Clinical Oncology, ASCO, on our Phase II DeCidE1 study in advanced recurrent ovarian cancer. Results from this ongoing study showed prolonged durable clinical responses, continued favorable tolerability and strong translational data linking observed clinical benefit and survivin-specific T cells. They also showed treatment generated survivin-specific CD8 T cell response in 87% of evaluable patients and survivin-specific T cell clones infiltrating tumors as early as day 56 flowing treatment with DPX-Survivac.

As of the cut-off date on May 2, 2020, 19 patients were evaluable for efficacy, and 4 patients or 21% were still receiving treatment. 5 out of the 19 patients or 26% achieved a partial regression on target lesions, with tumor regression less than 30%. These results compare very favorably to the documented standard of care of 12% clinical response rate associated to the single-agent chemotherapy available for late-stage recurrent ovarian cancer. And this, we believe, warrants further clinical development for DPX-Survivac in this indication.

Finally, a quick update on our Phase II Basket Trial in multiple advanced metastatic solid tumors. As of August 3, a total of 100 patients out of the planned 184 patients were enrolled across all 5 indications at 19 clinical sites in Canada and the U.S.

As mentioned previously, the COVID-19 pandemic has impacted the enrollment and data collection of this study. However, we remain on track to report updated results by the end of this year.

On a final note, I'm very pleased to report that subsequent to the use of our at-the-market facility and the private placement during the quarter, we ended the quarter on our strongest financial position here, but I will let Pierre further expand on this later on the call. This financing realized during challenging time will significantly extend our cash run rate and position us favorably for the future. We are grateful for the extraordinary work and commitment of our employees and the continued support of our shareholders and partners. We look forward working closely with them as we continue to deliver on IMV's great opportunities.

And this concludes my comments. I will now turn the conference over to Pierre for a review of our financials. Pierre?

Thank you, Fred. I just want to remind you that all the numbers I will be discussing are in Canadian dollars.

So for the second quarter of 2020, we incurred a net and comprehensive loss of $7.3 million or $0.13 per share, which compares to a net loss and comprehensive loss of $5.1 million for the quarter ended June 30, 2019. This is mainly explained by an increase in R&D expenses of $1.5 million for the quarter ended June 30, 2020, compared to 2019. This increase comes from higher clinical costs related to the Basket Trial and also higher personnel costs, reflecting an increase in headcount. It was partially offset by a decrease in travel expenses and also lower clinical costs related to the DeCidE1 Phase II study of DPX-Survivac in patients with advanced recurrent ovarian cancer.

We had an increase of G&A expenses in the quarter of $800,000 compared to last year. And this is mostly explained by an increase in insurance, higher legal and professional fees and also higher noncash DSU compensation, partially offset by a decrease in travel expenses resulting from the COVID-19 travel restrictions.

For the 6-month period ended June 30, 2020, our cash burn rate was -- that is defined as the net loss for the period adjusted for operations not involving cash was $15 million. It was a lot lower in the second quarter compared to the first quarter. And we expect that the cash burn for the remainder of 2020 is going to be around $6 million per quarter.

As of June 30, 2020, we had approximately $30.6 million of cash and potential sources of cash, which does not include the additional funding for the development of our DPX-COVID-19 that was awarded after June 30 by various governmental organizations in Canada.

Also, after June 30, we sold under our at-the-market facility 4.8 million shares for gross proceeds of USD 24.5 million or CAD 33.5 million. So the ATM is now completed. If we consider the government funding and the fund raised under the ATM in July, on a pro forma basis, the corporation had approximately $68.1 million in existing and identified potential sources of cash at the end of June.

IMV is in its best financial position it has never been. And as of August 11, 2020, the number of issued and outstanding common shares was 66.5 million shares, and a total of 5 million stock options, deferred share units and warrants were outstanding.

Please take note that our financial statement for the 3-month period ended June 30, 2020, and the related MD&A are available on SEDAR and on EDGAR.

Thank you for your attention. And I will now turn the call back over to Fred for his closing remarks.

Thank you, Pierre. As you can see, we have recently made tremendous progress validating our platform, advancing our clinical assets and strengthening our balance sheet. Our team got mobilized and moved quickly to develop a vaccine candidate against COVID-19, advancing the clinical and manufacturing processes while securing non-dilutive funding, which placed to put us in a position to deliver preliminary Phase I results this fall and then potentially initiating a Phase II shortly after.

With respect to oncology, we recently delivered great results, further establishing the ability of DPX-Survivac to shrink both solid and hematologic tumors with long-lasting clinical responses and a highly differentiated safety profile.

Before the end of the year, we are on track to report updated data from Phase II studies in DLBCL, ovarian and basket test study in other solid tumor indications. As these results emerge, we plan to further engage with regulators on the design of potential pivotal trials in support of an accelerated pathway for DPX-Survivac in relapsed/refractory DLBCL and advanced ovarian cancer.

As we continue making progress in our quest to deliver improved outcomes for patients, we are grateful for the continued support of our stakeholders, partners, shareholders and employees. We have a strong balance sheet. Our team has the will and the means to deliver on IMV's great opportunities throughout 2020 and beyond.

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

(Operator Instructions) Your first question comes from the line of Jim Birchenough with Wells Fargo.

Yes. Can you hear me?

Yes.

Yes. Congrats on all the progress. A couple of questions, just maybe starting on the DPX-COVID-19. What's left to do before starting the Phase I? And maybe remind us of the time line for assessing immune response in that study.

And on the preclinical data, just wondering when we might see that published and how would you say that compares to data you've seen published from other vaccines in the space.

Okay. The communication was not great, Jim, but I think I got your question, but let me know if I'm missing anything. So we are very grateful of the kind of collaboration we're having with Health Canada. They've been very helpful. And as you know, we are working on a very compressed time line, so the requirement for starting Phase I are really outside of what would be usually required for that. And they've allowed us to have a continuous discussion, kind of a rolling file application to start the Phase I rather than the typical filing you are doing. So that's where we are agreeing on all the things that have to be completed before we initiate vaccination. But like I said, we believe we know that at this point that we'll be able to initiate vaccination before the end of the summer. Both Health Canada and IMV are willing to move very quickly. At the same time, I think it's also a question of being reasonable in the equation and definitively on IMV side. We are not willing to place undue pressure on regulatory authority just to go faster.

And Fred, just on the preclinical data, when we might see that published? And how would you say what you've seen compares to preclinical data from others?

Yes. Well, both parts of your question will be my answer. As we're planning to do the publication, of course, but we also are mindful that between the time we started and where we are today, there's been a lot of publications out. And since people -- a lot of people in the space are making those comparisons, we believe it's very important for us to -- when we do the publication that we have enough results so that people could make those comparisons. So the bar has been moving up because there's been a lot of preclinical studies published in the last 8 weeks, and we're just -- we just want to make sure that when we do the publication, all the elements that people will be looking for to make those comparisons will be in there. So hopefully, this will come close to the initiation of the vaccination in humans.

I think Jim, and I know if you agree with me, but in terms of comparison, the important things for us are immunogenicity and functionality. And on those things, I think it's -- in my view, there has not been a lot of differences in between vaccines especially as everybody is using different assets. But generally speaking, we feel that we have a vaccine that is at least equivalent to anything else that's been published or shown in the space. And that based on our clinical experience with RV that our vaccine stands a good chance to provide the differentiation into aspect, which, I believe, it's my personal opinion, but which I believe will be the most important aspect for consideration of whether a vaccine should be used for mass vaccination, which is what is the duration of the immune response and then the potential protection? And second, what are the differences between the different groups and especially in the elderly immunocompromised population? And are we able to get an immune response in this population that will provide protection? And that's probably the 2 areas where the most important differentiation will be seen in between vaccines. And that's why, for us, it's so important to have the elderly population directly in the Phase I so that we can potentially highlight the potential benefit of the approach that we've taken with DPX-COVID-19.

Great. Congrats again on the progress.

Thank you, Jim.

And your next question comes from the line of Ted Tenthoff with Piper Sandler.

Great. Congrats on the success. So I appreciate the progress on the COVID -- SARS-CoV-2 vaccine. And I wanted to ask a little bit just with respect to DPX-Survivac. Based on data, potentially later this year, I think you said, what do you envision as potential next steps? Obviously, it will be data-dependent, but just trying to get a sense for sort of what -- how you're preparing for success.

Thanks, Ted. Since Joanne is doing most of this work, I'll let Joanne answer that question.

Hi, Ted and everyone. Thank you for the question. Yes, so it is data-dependent, of course. So what we are currently doing is bringing in all that data to better understand the data set that we have, and that includes the clinical characteristics as well as the translational data. And then the plans are to share that with our key opinion leaders and to take some of their advice and other advisers that we have and then provide an approach that we would propose and to take that to, for example, FDA and to discuss with them how to move this program forward. We think the data is very promising. So we think we have an approach in DLBCL as well as in ovarian cancer. So we're very excited about that and actually in the process of doing all those steps that I've just talked about.

Cool. And is it -- potentially, it could be a registrational study for those 2 indications based on the success we've seen, or a little early to say?

It's certainly our goal to do that as quickly as possible. So that's why it's important for us to look at the data and to have these conversations and make sure that we can design the best trial that would allow us to do that. And then that, of course, as you know, will require input from the health authorities.

And your next question comes from the line of Joe Pantginis with H.C. Wainwright.

Hope you're all doing well and your families as well. Two questions. First, Fred, if I heard you correctly, I want to focus on manufacturing, and I think you said, obviously, you have internal capabilities, especially for COVID vaccine, through Phase II. But I wanted to focus on the long term. If the vaccine is effective, if DPX-Survivac moves forward, what is your internal capacity to move forward, needs for expansion? And would you look to basically bring on a CDMO potentially?

Thanks for the question, Joe. Yes, so we have been and we have -- we actually have been using CDMOs at IMV for quite a long time. We have CDMOs in the U.S., we have CDMOs in Canada. And related to COVID-19, what I said is that we started discussions with potential partners in other countries. Something very different between DPX-Survivac and COVID-19 is that with COVID-19, there is a very strong willingness in a lot of countries to have domestic manufacturing, especially, I would say, the [fee advantage] part. One of the key advantage that we have with DPX-COVID-19, as a reminder, this is a fully synthetic vaccine. They're a very simple process of manufacturing, and it's very portable. So it means that in any country of the world, advanced country or even emerging country of the world, they are out there, facilities with lyophilization [and vaccination] capacity that could produce DPX-COVID-19. So we have that in Canada with our CDMO, we have that in the U.S. with our CDMO, and again, we are planning to expand in other countries.

The great thing for the company, and I want to be careful what I say about the opportunity around COVID-19 because it's been very disruptive for a lot of people around the world, but just from the potential acceleration of our business plan, all the work that is being done in a very accelerated way for bringing the process of manufacturing to Phase III validation, which is what is required for getting on the market. We were already planning to do that for DPX-Survivac with the idea, as Joanne just highlighted, that we could have the potential to move into potentially several registration trial, Phase IIb, maybe that could support registration by next year. The manufacturing needs to be ready.

So we already had a plan for that, but all the work is being done with COVID-19. It's going to be contributing actually the plan we initially had for DPX-Survivac. So that's really a great opportunity for the company to actually accelerate manufacturing development for oncology as well.

That's really helpful. My second question is, when you look at all the oncology programs and, especially, I mean it also is certainly applicable for the COVID vaccine is what kind of ongoing studies or rather even your plans to disseminate data regarding the T cell response, durability, types of T cells, the populations, et cetera, through the course of these studies?

So just to repeat the question, just to make sure I understand, you're asking about additional translational data on the cell response across our studies and how it was linked with clinical responses.

Yes. Yes.

Well, at ASCO, we provided additional information on this, but definitely, for us, and you've been following us for quite some time, it has always been a very important consideration. I've said repeatedly myself that one of the missing demonstration, the space with cancer vaccines or any technology using the immune system was this ability to prove that you can generate tumor regressions. And this was a major goal of the company to be the first or being one of the first to show that you can actually program T cells in vivo in humans and prove that they will infiltrate the tumor and generate tumor regression. And I believe that we've made this demonstration very clearly in ovarian cancer. And this is one of the best, first demonstration of that. This is the proof that you have an active product.

And in oncology development, that first proof that you have an active product has always been a very important step, especially, as you know, there's many combinations in oncology treatments, and most treatments are combination. So you need to start with proving you have activity, and it includes T cells. So we've always done it. We'll continue to do it. So you can expect to see us providing the information about the T cell across all our trials, continuously DLBCL, ovarian and the Basket Trial with Merck, with Keytruda.

(Operator Instructions) Your next question comes from the line of Mayank Mamtani with B. Riley FBR.

This is Sahil on for Mayank. Congrats on all the progress. Just a couple of brief questions from us. As you think about this upcoming Phase I sort of interim look at the COVID-19 program, could you give us a little more color on how we should think about some of the previously generated data? And I'm thinking the CD8 T cell responses in the ovarian cancer program and even some of the local IgA responses that we're seeing in RSV. Just in terms of what are some sort of the analyses we can expect at that Phase I study? And then maybe taking a bit step further on, what would trigger the Phase II?

Thanks, Mayank. So we -- there's been a -- like for preclinical results, there's been a number of clinical results out there. And I think there's a very strong consensus around what are the parameters to look for to get a sense of the potential level of protection that can be achieved by a candidate vaccine in a Phase I trial, and it's mainly antibody responses, the level of antibodies. I think duration is a missing information. I mean there's some data on duration, but it's very limited at this point. And then the functionality of all those antibodies, are they able to bind the virus and the spike and are they able to generate neutralization. So I think those are the 2 most important parameters, in my view, at this point, and we are planning to report exactly those 2 things.

Beyond that, the T cell contribution to protection, I think it's an important consideration, and it's a thing that is complementary to the antibody response. But if you look at the very long history of vaccines, so there has never been a clear correlation, I mean in a fully controlled clinical study where people were trying to show correlation between CD8 T cells or CD4 T cells and protection. It was never successful. So in my view, unless we discovered something new with those programs, I think that the T cell component is going to be an additional information provided, but the real surrogate for protection will remain antibodies, like they had been for vaccine for a very long time.

Again, I'll repeat that we -- I think we -- I don't know everything that's been done in the world, but we are probably the first in the space with a targeted vaccine. And the goal of the approach we had is to improve duration and to improve the potential efficacy of the vaccine in the elderly population.

So for us, as we move through Phase I to III, we'll be paying a lot of attention to those 2 criteria as we report the clinical results, obviously, between now and the end of the year.

Great. That's really helpful. And then maybe just as a brief follow-up, how does the kind of the preliminary data that you guys are anticipating to release, how do you think about that influencing future non-dilutive funding, recognizing Health Canada's validation for funding the Phase I study kind of thinking of later-stage development? And how you're thinking of capital expenditure moving forward in general would be helpful.

Yes. So like I said, we have been in very close collaboration with the Canadian government, not only of Canada, but the funding agencies that are supporting the development of vaccines in Canada. You may have noticed, by the way, that the Minister of Innovation tweeted on IMV last week saying that for Canada, it's important to have access to made-in-Canada vaccine. It's not because they are -- they want to defend the economic impact, but it's more about there is a real risk of if you don't have domestic manufacturing that you don't have access to vaccines, depending on what's going to be happening with the most advanced vaccines, whether they will be efficacious or not. So I think a lot of governments in the world are trying to secure access to vaccines that are more advanced, but at the same time, really paying attention to, can we build a domestic manufacturing capacity for COVID-19? So the -- we are in close collaboration with them. They've seen every piece of data that we have, including all the preclinical results, and we are hopeful that they will continue to support us as we move into a scale-up of manufacturing in Canada and Phase II/III clinical trials in the upcoming months.

And there are no further questions at this time. I will turn the call back over to the presenters for closing remarks.

Thank you. I don't have any closing remarks. I just want to say thank you to everyone for your time this morning, and good questions.

This concludes today's conference call. You may now disconnect.