IMV Inc (IMV) 2021 Q4 法說會逐字稿

Good day, and welcome to IMV's Fourth Quarter and Fiscal 2021 Earnings Call. (Operator Instructions) As a reminder, this call may be recorded. I would like to turn the call over to Joy Bessenger, Head of Investor Relations and Corporate Strategy. You may begin.

Thank you, Michelle. Good morning, everyone. I'm Joy Bessenger, Head of Investor Relations and Corporate Strategy for IMV, and I'm pleased to welcome you to our fourth quarter clinical and operational update conference call.

I'm joined today by Andrew Hall, our CEO, Dr. Jeremy Graff, our CSO; and Pierre Labbe, our CFO. 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 the 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 the applicable securities laws in Canada and the United States. The press release, the annual information form, the MD&A and the financial statements have all been posted on our website at imv-inc.com. If you wish to receive a copy of these documents, please contact us.

Please note, as always, that we will take questions from sell-side analysts only. And I now turn the call over to Andrew to provide an overview of our recent highlights and to set the stage for what to expect in 2022. Andrew?

Thank you, Joy, and Good morning, everyone. Welcome to IMV's clinical, operational and fourth quarter and year-end results call. I'll provide a brief overview of our recent milestones and a look ahead to what 2022 will look like for IMV.

Jeremy will then discuss recent highlights of our clinical, translational and foundational programs, including some key points from our recent R&D Day. And finally, Pierre will provide an overview of our financial results for the fourth quarter and year-end 2021 before we take questions.

In 2022, importantly, we advanced MVP-S, or Maveropepimut, closer towards registration with the initiation of a Phase IIb clinical study in DLBCL that we call VITALIZE. We also completed the Phase II DeCidE1 ovarian cancer trial and closed the Basket Trial, highlighting the encouraging results in bladder cancer.

We took action to extend our cash runway into the spring of 2023, and we've reinforced the scientific foundations with presentations of our technology, translational research and clinical data at various key scientific congresses. In a difficult year, these accomplishments have set the stage for a very important 2022.

In 2022, we are continuing the expansion of our clinical programs with Maveropepimut as both a monotherapy and in combination with Keytruda across various settings in various different indications. MVP-S has now shown definitive clinical benefit across multiple cancers, in addition to a very attractive safety profile and an impressive durability of response.

Coupled with supporting translational data, we believe that we're on the right path towards potential registration. This is a clear priority for IMV. As we make good progress with MVP-S in the clinic, we are actively seeking opportunities to add depth to our pipeline by leveraging the versatility and novel mechanism of our DPX platform through business development.

MVP-S is an exemplar of what our platform can do. This is a repeatable plug-and-play model that we plan to capitalize on this year in parallel with our continued clinical progress. We anticipate that this will enable us to build a comprehensive pipeline of immune-educating programs that are improved by formulation with DPX.

We remain open to out-licensing opportunities for our noncore infectious disease programs. However, as we laid out in our quarter 3 call last year, we will not develop these programs in-house on our own. Our foundational research continues to further strengthen our approach and our platform.

We are committed to presenting new data on both the mechanism of action and our clinical programs at high-profile scientific congresses and in peer-reviewed journals and clearly communicating our progress and milestones to all stakeholders.

Our recent R&D Day event and upcoming late-breaking presentation at a plenary session at AACR are 2 examples of these efforts. In 2022, we will drive value through 2 strategic priorities: one, to accelerate Maveropepimut towards registration; and two, to further enrich our scientific foundation of the DPX platform to enable business development.

I'll now pass to Jeremy to present the details of our recent clinical, translational and foundational science progress as well as our upcoming 2022 milestones. Jeremy?

Thank you, Andrew. So let's first highlight the exciting advances across the last few months here at IMV. First and foremost, with our lead trial in relapsed/refractory DLBCL, the Phase II VITALIZE study, we have enrolled and dosed our first patients, we've activated multiple sites throughout North America, we are aggressively activating sites globally to enhance enrollment further.

We're very excited as well to report that the final trial design for the ovarian cancer follow-up to the DeCidE trial, now called AVALON, has been approved by the regulatory authorities in both the U.S. and Canada. We are in the process of activating sites so that we can enroll patients on that very important indication.

As Andrew indicated, we are reporting the top line results from our bladder cancer Basket Trial in the advanced metastatic setting. These results were selected for a podium talk at the upcoming AACR Annual Meeting. Importantly, the data show that we do see clinical response, including complete responses in patients after checkpoint inhibitor therapy.

The last 2 trials we'll talk about are trials that are meant to help deepen and enrich our understanding of the mechanism of action for Maveropepimut-S and for our second product, DPX-SurMAGE.

The first of these trials is a trial in breast cancer in hormone receptor positive, HER2-negative patients. We've enrolled 2 patients to date with our collaborators at the Providence Center out in Portland, Oregon.

The second of the 2 trials is also a neoadjuvant-style trial in non-muscle invasive bladder cancer. This trial will proceed with 2 cohorts. The first will be dosed with our lead DPX product Maveropepimut-S and the second with our second clinical product, DPX-SurMAGE.

The protocol has been approved, the first site is now active, and we are screening patients actively. Next slide, please. Let's look at our upcoming milestones for '22. In the DLBCL VITALIZE trial, we expect to be able to provide a clinical update on our first patients by the end of summer 2022.

As I said previously, the bladder cancer trial in advanced metastatic patients will be highlighted at this upcoming AACR, and that has prompted us now to have a series of key opinion leader advisory board meetings to inform the follow-on trial designs in this particular indication.

In the ovarian indication, with our Phase IIb AVALON trial we expect to initiate and enroll patients starting about midyear, sometime in the third quarter. As I said before, in our breast cancer neoadjuvant trial we'll provide clinical updates from that trial -- we've already enrolled 2 patients -- clinical updates from that trial by the end of the year.

And in our non-muscle invasive bladder cancer setting, where we're testing our lead product Maveropepimut-S and our second clinical product DPX-SurMAGE, we expect to be able to release preliminary data on the first cohort by the end of the year. So an exciting year for us.

Next slide, please. I want to highlight the presence we'll have at the upcoming AACR Annual Meeting. As you may know, the AACR Annual Meeting is one of the very biggest, most prominent meetings in the cancer research field held every year. This year it will be held in New Orleans. We have 2 distinct opportunities to showcase our work on the DPX platform and on MVP-S.

The first is, of course, the podium presentation on the top line data from the Basket Trial bladder cancer data. And the second is a poster presentation that helps us to explain more deeply our mechanism of action. We now know that immune cells called natural killer cells are deeply involved in the efficacy that our DPX platform provides. So that helps us understand better exactly how the DPX platform informs an anticancer immune response.

Next slide. So let's talk a little bit about our DPX platform. We highlighted the science of this platform at our recent Research and Development Day. It's important to understand that the platform itself is very different and very distinct from other ways of educating an immune response in cancer.

First and foremost, the physicochemical nature of the platform is different. It is a lipid-in-oil non-emulsion formulation. As a consequence, it controls the release of cargo. The cargo packaged in DPX is only actively taken up by the action of specific immune cells called the antigen-presenting cells. Those cells then take that cargo back to the lymph nodes, mirroring the natural physiologic flow of antigens through the immune system to prime a response within the lymph nodes.

Next. Importantly, we package within DPX not only peptides to instruct a very specific response, but other components that help to round out a more comprehensive immune attack. These include innate immune stimulators like polydIdC, which is in our lead product. They include peptides that are designed to activate not only the killer CD8 T cells, but also the helper CD4 T cells, so that we get a more persistent, more complete, more robust immune response.

And lastly, we highlight that the DPX platform itself is very versatile. Our lead product, Maveropepimut-S, and our second clinical product, DPX-SurMAGE, both pack peptides into the product. We know from our preclinical work, though, that we can package more than just peptides. We can package whole proteins, whole viruses, viral-like particles, small molecules and even nucleic acids like mRNA in this platform to drive a very specific immune response.

So it's a very versatile platform, and as Andrew mentioned before, that, we think, is a springboard to be the opportunities in 2022.

Next slide. Let me highlight for you our lead DPX product, Maveropepimut-S, or MVP-S. This particular slide shows preclinical data exemplifying how much more effective the DPX platform is at instructing an immune response than conventional emulsions that are used in most vaccine platforms.

You can see on this left-hand panel, if we package peptides to the mouse version of survivin in a conventional emulsion and dose those mice, we don't see much in the way of SFU responses. SFUs are spot forming units; they are the way we score T cell reactivity.

On the right-hand side of this panel, with DPX, you can see that we inspire a much more robust T cell response. On the right-hand panel of this slide, you can see that as well when we use the human product, Maveropepimut-S, in transgenic mice that are engineered to be able to respond to the human product.

You can see in DPX, the Survivac induces a very robust T cell response. But in the CE-Survivac, the conventional emulsion Survivac, that response is muted. Delivering information through DPX absolutely matters.

Next slide. And this has been our experience, the DPX-Survivac product, which we now call Maveropepimut-S or MVP-S, is really a product where we've licensed in peptides to the survivin cancer protein from Merck KGaA.

When Merck developed these peptides themselves, they published a paper on their experience and what's represented on the left-hand side of this slide is that experience from the Lennerz paper in 2014. They are showing that same T cell reactivity data, but they only show this in roughly 14% of their treated advanced cancer patients.

Our experience with those very same peptides packaged into DPX is very different. In our advanced cancer patients, nearly 2/3 of all patients show us very specific reactive T cells. Importantly, this is connected with clinical response. In the Merck KGaA experience, as reported in the Lennerz paper -- next, please, Mark -- the best clinical response was stable disease.

In our experience, the best clinical responses have included complete responses and partial responses as well as durable stable disease in multiple indications, both hematologic cancers and solid cancers, so DLBCL as well as ovarian, and now we'll show that in bladder cancer here at the upcoming AACR.

Let's just stay on this slide mark, this is fine. So to round out the discussion on the DPX platform, we recognize the potential this platform has. It's versatile. We can pack a lot of different information in it. And why it is different is because it allows for the natural flow of antigen, or it mimics the way antigen naturally flows through the immune system.

The DPX platform is only taken up actively and is then trafficked to the lymph node by the action of the antigen-presenting cells to promote a robust, persistent T cell response. We drive the activation of multiple immune cell subtypes with the different cargo we package into DPX.

We drive not only the CD8 T cell response, but also the response from CD4 helper cells, antigen-presenting cells, B cells and, as we'll show at the AACR, the natural killer cells. This is a coordinated immune response we think is linked to efficacy.

The DPX package, as I said before, can drive the ability to deliver multiple different types of cargo. So as we think about BD opportunities, business development opportunities, we can go beyond the peptides that we have in our first product and in our second product. We can package a variety of information.

And lastly, our lead DPX product, Maveropepimut-S, has provided us with clinical proof-of-concept: CRs, PRs, durable stable disease in multiple different cancer types, along with a persistent survivin-specific T and B cell response.

With that, I'll hand over the presentation to our CFO, Pierre Labbe.

Thank you, Jeremy. In 2021, R&D expenses were $23.1 million, compared with $19.9 million for the year ended December 31, 2020. The increase of $3.2 million is primarily due to an increase in manufacturing and development costs for MVP-S, start-up costs for the DLBCL Phase IIb trial, and an increase in personnel costs because of increased headcount.

These increases were partly offset by a $3 million decrease in DPX-COVID-19 development cost due to a strategic realignment and $2.4 million decrease in Basket and ovarian trial costs. G&A expenses were $16.2 million for the year ended December 31, 2021, compared with $11.3 million for the year ended December 31, 2020.

This $4.7 million increase is explained by an increase in salaries and noncash stock-based compensation. It is also related to planned hiring and executive leadership changes, an increase in the company's insurance premium, an increase in professional fees, as well as a slight increase in the Board of Directors' compensation.

The government assistance totaled $3.2 million in fiscal 2021, compared to $5 million in 2020. The decrease is attributable to lower development costs for DPX-COVID-19, which are reimbursed only as costs are incurred.

The net loss and comprehensive loss for 2021 was $36.6 million or $0.49 per share, compared to $23.4 million or $0.39 per share for the year ended December 31, 2020.

Next slide. As of December 31, 2021, the company had cash and cash equivalents of $38.6 million, compared to $36.3 million at the end of 2020. The cash generated by financing activities primarily represents proceeds of $25 million from an equity financing and a drawdown of $15 million from the $25 million non-dilutive debt facility with Horizon Technology Finance Corporation.

The additional $10 million available under the facility will be accessible upon IMV achieving a preset clinical milestone in 2022, which we are on track to meet, and as such is included in our projection. So including the $10 million remaining debt available, we expect to be able to fund operations into Q2 of 2023.

As of March 17, 2022, the number of issued and outstanding common shares was 82.2 million and a total of 19.7 million stock options, warrants and deferred share units were outstanding.

Before I turn the call to Andrew, as this is my last call as CFO of IMV, I would like to take the opportunity to thank all the people I work with at IMV over the last 5 years.

I believe it is a good timing for me to retire for many reasons. First, as I just mentioned, we have cash into Q2 of 2023, so well beyond all our important milestones. Also because of the team that is now in place at IMV. This is the best management team assembled since the beginning of the company, and in the last 12 months we have been able to attract many great talents. And for me, it is a testimony of the quality of the science and the clinical data that we have generated so far. Being the largest shareholder of IMV among the management team and the Board of Directors, I will continue to follow the company very closely.

I wish great success to IMV as success will also mean benefits for the patients that we are treating. And they are at the center of everything that we are doing at IMV. So thanks again to Andrew, Jeremy, all the employees and the Board of Directors, and best of luck to you all.

I will now turn the call back to Andrew. Andrew?

Thank you, Pierre. And on behalf of IMV, let me also say thank you for your hard work, advocacy and terrific leadership over the last 5 years. On a personal note, Pierre, I'd just like to say thanks for your friendship and wisdom. You're a first-class human being, mate, and I wish you all of the best as you progress to your next chapter.

So in 2022, we are focused on executing our corporate strategy and building upon what we achieved in 2021. This is articulated through further expansion of our clinical efforts to move Maveropepimut closer towards registration in several indications.

We are leveraging the data we have gathered in our DPX platform to expand our pipeline through business development. We will also use our foundational science and translational research to further build out our knowledge base around how DPX educates the immune system to mimic the body's own immune response.

We're in a strong position this year to execute on this strategy. I look forward to updating you as the year continues and make a commitment to transparency as we progress. Thanks for joining us today. And Michelle, we will now take questions.

(Operator Instructions) Our first question comes from Joe Pantginis with H.C. Wainwright.

Also, Pierre, I wish you the best in the next stage of your life, and it was great working with you. So all the best. So I guess, Andrew, I wanted to focus on 1 of your 2 strategic priorities for the company, and that's BD.

And I guess I would approach it this way: can you discuss maybe the overall optionality that you would be looking at and flexibility that you have with regard to business development versus just having companies come to you with a particular antigen, all the different things you might be looking at with regard to even tech components, potential combinations, in-house antigens that you might have that you haven't disclosed yet? Just overall optionality.

And Joe, nice to hear from you. And I think it's a terrific question. I'll start the answer, and I'll let Jeremy complete it. One of the elements that's not being perfectly well communicated from IMV is that our technology is effectively a drug delivery platform. And it has iteration that can be sort of applied across a broad theme of drug targets.

In other words, we have the opportunity to deliver small molecules, virus-like proteins -- virus-like particles, and all sorts of other therapeutic cargo. The lowest hanging fruit, and you correctly articulated it, is antigen targets. The vision we have in setting up a strategic priority around business development here is that -- and we've seen evidence of this recently communicated with other platform-type deals, is that we would work in collaboration with companies that have sitting on the shelf antigen targets that maybe didn't progress for the reason that Jeremy articulated earlier in the call, but they weren't delivered thoughtfully.

And then with that collaboration, we can formulate, we have in-house transgenic animals. We have the ability to very rapidly improve on that technology in a way that's material for efficacy, and then, in collaboration with that partner, develop that asset clinically. We can do that quickly, we can do that cost effectively, and we can do that in repeat mode.

What's really interesting, though, is that there are a lot of these targets that -- and you probably know this as well as I do, Joe -- that just don't have satisfactory intellectual property coverage. They're naturally occurring, they don't necessarily have the ability to create an IP estate around that technology.

By formulating with our platform, we believe we can create an intellectual property estate around that target that makes it materially valuable to develop. And I think that's a really important quality that our strategic focus is going to lean heavily into.

Jeremy, do you want to add flavor to that, maybe with innate immune-educating part of our platform that might be in addition to the therapeutic target?

Sure. And first of all, it's a great question, Joe. But I do think the versatility of the platform allows us to do many different things. We have, within our lead product and within our second clinical product, polydIdC. It is an activator of innate immune functionality. It allows antigen-presenting cells to mature and function like they should to instruct a T cell response, et cetera.

It's certainly possible to swap that out and add different innate immune stimulants. There have been a number of companies that have been focused on CpGs and other TLR agonists. That might be an interesting play. We can certainly package peptides.

I think what we're exemplifying with our second clinical product is we can package peptide antigens that target more than one cancer protein at the same time. And in fact, in our preclinical work, we've been able to target more than a dozen at the same time. So we think there's a lot of optionality here for the platform. We can work broadly. As Andrew said, the low-hanging fruit really is peptides because that's where we've spent most of our time.

But we do know that we can package other cargo, whether it's different types of innate immune stimuli, whether it's whole proteins, whole viruses, et cetera, et cetera. So that versatility allows for a lot of optionality when we speak to different potential BD partners.

Yes. And Joe, sort of to round out the answer, the intent is to bring technology to IMV from major development partners. We [aren't] really good at formulating. We're really good at sort of preclinical development of these assets based on what we understand of DPX technology, and we are building strong competencies to do early clinical development.

The model would then create a collaboration such that we would either return the asset after improving it through that period or codevelop the asset. We are mindful that the value that we can bring is easy to demonstrate early and therefore, potentially easy to demonstrate value return for shareholders and IMV based on an expansion of what our technology can do.

(Operator Instructions) Our next question comes from Brandon Folkes with Cantor Fitzgerald.

Congratulations on all the progress, and Pierre, all the best with your retirement. Maybe just a few from me more just on sort of, yes, the spending, I guess. How do you think about the cadence of spending in 2022, just given you do have a lot going on at this stage?

Is 4Q 2021 quite representative of your cost base currently? And then maybe just from a high level, how do you characterize the environment for enrolling your current set of trials? Obviously, it's been an interesting first quarter, but it seems to be improving from a COVID perspective. So just any color there in terms of how you would characterize the environment for enrolling your trials.

Thanks, Brandon. Nice to hear from you. The first question, and it was a little difficult to hear, but I think it was with respect to rate of cash burn. Is that what the first part of the question was, Brandon?

Cadence of spending in 2022.

Cadence of spending. Okay.

Yes. And how representative is 4Q to [2021]?

I think that the short answer is that our cadence of spending is a function, obviously, of the way we're activating sites for clinical enrollment. Our capital allocation in 2022 is very heavily geared towards our first strategic priority, which is accelerating the lead product towards registration.

As we stand today with the VITALIZE study for DLBCL, we're on track, as our guidance suggests, to create a first look at the data in quarter 3 or in the late summer of this year, and the cash burn in quarter 4 reflected the onboarding of sites for that element.

And as we've moved through this quarter as we're on inboarding patients, we're expanding the sites internationally. And so I would expect the cadence of burn to increase slightly over quarter 4, but at a rate that's very predictable based on what you correctly said, sort of coming out of the COVID consequence.

And I think the ability for sites to then start actively bringing patients in at a rate that is probably greater than what it was a month, 2 months, 3 months ago, is going to reflect the way in which we're burning through cash. With respect to the trial recruitment question, we are encouraged about where we sit with the VITALIZE study.

We believe we are very on track to deliver data, as we promised, in the summer. And I think that is a milestone we are very much looking forward to as an organization to fully validate the clinical proof of concept. With respect to cash burn, we're obviously enrolling the -- or, I would say, bringing sites online for the AVALON trial, and we hope to have that accelerating through the second quarter of this year. And so there will obviously be a cadence of increased spending through this year.

But as Pierre mentioned, with the way in which we managed the cash runway, we have a current state cash to stretch us into the spring of next year, and that is functioning cash burn at a rate that we think is very predictable.

Yes. And Andrew, if I can just add to what you were saying related to your question, Brandon. I don't think that burn rate of Q4 is representative of the first part of 2022 because, as we were saying, with the $10 million of debt plus the $38 million of (inaudible) cash that we have, we are going out to sometime in Q2 of 2023. So it gives you a pretty good idea of what it's going to look like.

And as we will -- our first part of the year is probably to be lower because we are starting enrollment in the trials, but the cadence is going to increase in the second half of the year.

There are no further questions at this time. I'd like to turn the call back over to Andrew Hall for any closing remarks.

Thank you, everyone. It's nice to sit here in the office in Boston with the management team and do our first in-person quarter conversation. So it's a little bit of a return to some sort of normality. I'd like to take the chance to say thanks to all of the IMV employees. What we're doing here matters, and I am really excited about what 2022 brings. I look forward to updating the world as we progress through 2022 with really exciting clinical and platform-related information. And I thank you all for joining the call today. Have a lovely day.

This concludes the program. You may now disconnect.