IMV Inc.
Q1 2021 Earnings Call Transcript

Published: 12 May 2021

[Operator:]

Good morning and thank you for standing by. Welcome to the IMV Inc. First Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. . I would now like to hand the conference over to Pierre Labbé, Chief Financial Officer. Thank you. Please go ahead.

[Pierre Labbé:]

Thank you, operator. Good morning, everyone. My name is Pierre Labbé, CFO at IMV, and I am pleased to welcome you to our clinical and operational update and first quarter financial results conference call. I am joined today by Fred Ors, our Chief Executive Officer; and Andrew Hall, our Chief Business Officer who will available for the question-and-answer period at the end of the call. Fred will begin with an overview of the company’s operational highlights and Andrew will follow with comments about the clinical programs. I will conclude with the financial summary of the quarter.

[Fred Ors:]

Thank you, Pierre. Good morning, everyone, and welcome. I am very pleased today to have the opportunity to review our progress in the first quarter, including important milestone in our cancer T cell therapy program. Our clinical programs continue to progress according to plan, including the initiation of our Phase 2 relapsed/refractory DLBCL study in combination with Merck’s KEYTRUDA. With respect to the study, we completed the regulatory filings and we have started enrolling clinical sites in the U.S. and Canada and are expanding into other countries. At the same time, we continue to expand the footprint of maveropepimut-S beyond the current ongoing trials in solid and hematological malignancies. Earlier this week, we announced a new investigator-initiated study in breast cancer, which we plan to initiate in the first quarter of this year. Andrew will provide further details about this study later in the call, but I want to share the enthusiasm that we have about this study. First of all, survivin has been identified by investigators at Providence Cancer Institute in Portland, Oregon has a biomarker of resistant to treatment in this patient population. This discovery is giving us the opportunity for the first time to test our survivin targeted T cell therapy in an early line of treatment. It is also a new adjuvant study, providing a unique opportunity to access complete tumor resection after surgery, and thus demonstrates the in vivo response to our study. We believe that both the level of information and demonstration that can come out of this study has the potential to create significant value for our platform and our shareholders.

[Andrew Hall:]

Thank you, Fred. Good morning, everyone. Before I get into the specifics, I'd like to emphasize, as illustrated on Slide 6, the steady progress IMV has made expanding the clinical footprint supporting the broad utility of maveropepimut-S. I'm also excited to present for the first time our second clinical asset, DPX-SurMAGE, a dual targeted T cell therapy that will be first investigated in bladder cancer. Looking ahead, we now have clear path to market for maveropepimut-S in DLBCL and compelling data in many indications with multiple pending catalysts set to occur over the next 12 months. I would like to remind you all that the clinical success demonstrated with maveropepimut-S is supported by the outstanding value proposition behind IMV’s novel DPX platform. This technology has enabled the demonstration of efficacy through a unique and potentially synergistic with other mechanism, with other immunotherapies that is well tolerated, easy to administer, and importantly cost effective to manufacture. It also supports DPX-SurMAGE and we're exploring its application for other non-peptide therapeutic targets. With that said, I will now review the progress of our oncology programs, starting on Slide 9 with relapsed/refractory DLBCL. As Fred mentioned, we filed our investigational new drug application with the FDA and the clinical trial application to Health Canada in parallel to support the initiation of the Phase 2b study. Considering the typical procedures and potential questions regulators may ask prior to approval, we anticipate the trial to be initiated towards the end of quarter two this year. This trial will first involve U.S. and Canadian sites, and then expand to Europe and Australia later this year. Our strategy here is to move as quickly as possible for this trial and to activate as many signs as necessary to ensure rapid recruitment. We know the space is competitive. Although from initial conversations with prospective clinical sites, we are confident that the differentiation of maveropepimut-S and KEYTRUDA will drive timely enrollment. As a reminder, this trial is a three-arm randomized, parallel group, Simon two-stage study that will assess the combination of maveropepimut-S and KEYTRUDA with and without cyclophosphamide with a third arm to evaluate maveropepimut-S as a single agent. Across the three arms of this study, IMV’s lead compounds will be evaluated in up to 150 patients with relapsed or refractory DLBCL, who have received at least two prior lines of systemic therapy and who have failed autologous stem cell transplant or CAR-T therapy.

[Pierre Labbé:]

Thanks, Andrew. Before I get into the financial, I want to underline a change in our accounting policy. Effective January 1, 2021, we adopted the U.S. dollar as our functional and presentation currency. Prior to this date, the functional and presentation currency was the Canadian dollar. The change in the functional currency from the Canadian dollar to the U.S. dollar was made to more closely reflect the primary economic environment in which we currently operate. The change in functional currency was applied prospectively. For the change in presentation currency, it was applied retrospectively, and therefore the financial statements are presented in U.S. dollars together with the comparative information as of December 31, 2020 and for the three-month period ended March 31, 2021. You can find more information on this page and Note 2 of the financial statements for the three-month period ended March 31, 2021. Now back to the financials. For the three-month period ended March 31, 2021, R&D expenses were 4.7 million compared to 5.1 million for the same period last year. The decrease of $400,000 was mainly due to a decrease in expenses related to the ongoing basket trial and also the timing of manufacturing activities for DPX-Survivac and DPX-SurMAGE. It was partly offset by an increase in personnel costs due to an increase in headcount and expenses related to the pre-clinical development of DPX-COVID-19. The government assistance totaled 1.2 million for the three-month ended March 31, 2021 compared to $400,000 in Q1 2020. This increase is mainly explained by government grants from the Canadian government for the development of DPX-COVID-19. The G&N expenses increased to 3.2 million from 2.3 million last year, and this is explained entirely by an increase of $900,000 in insurance premium. The net loss and comprehensive loss was 7 million or $0.10 per share for the quarter compared to 7.2 million or $0.14 per share for the same period last year. As of March 31, 2021, the company had cash and cash equivalents of 30.5 million compared to 36.3 million at the end of 2020. For the purpose of assessing the corporation as a going concern, although it is difficult to predict funding requirements, based on the current operational plan, it is anticipated that existing cash and cash equivalents and identified potential sources of cash, will fund operations and capital expenditure requirements until the first quarter of 2022. These estimates are based on assumptions and plans which may change and which could impact the magnitude and/or timing of operating expenses, CapEx and the corporation’s cash runway. It also does not take into account any use of the ATM that we have in place or any other potential non-dilutive funding. Cash and cash equivalents decreased by 5.8 million in the first quarter of 2021. We used $7.8 million of cash in operating activities and $0.4 million in investing activities. Financing activities generated $2 million and effect of foreign exchange on cash generated 0.1 million. The cash generated by financing activities come from our At-The-Market facility for gross proceeds of $2.3 million. As of May 11, 2021, the number of issued and outstanding common shares was 67.8 million and a total of 5.1 million stock options, DSUs and warrants were outstanding. Finally, take note that the corporation's financial statements for the three-month period ended March 31, 2021 and the related MD&A are available on SEDAR, on EDGAR and on the company’s Web site. 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?

[Fred Ors:]

Thanks, Pierre. Our presentation today should give you a good indication of the significant recent progress we have made expanding the footprint of maveropepimut-S in new indications and broadening our pipeline towards new targeted T cell therapies. At the same time, we're able to attract new and high quality Board members that will provide valuable guidance on advancing IMV to the next level on our path from a clinical stage company today to a successful pharma tomorrow. As we continue making progress in our quest to deliver improved outcomes for patients, we are also grateful for the continued support of all our dedicated employees, stakeholders, partners, and shareholders. Thank you for your attention. Operator, we are now ready to take questions.

[Operator:]

. Your first question comes from the line of Tom Shrader of BTIG. Please go ahead. Your line is open.

[Kaveri Pohlman:]

Hi. This is Kaveri for Tom. Thanks for taking our questions. I just have one. Can you talk about your rationale for selecting HR positive/HER2 negative breast cancer? There aren't a lot of immunotherapies approved in this setting and patients seem to respond well to therapies like BTK inhibitors and --

[Fred Ors:]

Thanks for your question. This is Fred here. I'll start answering it and maybe Andrew can complete. So it’s really the investigators that found our survivin T cell therapy because they have, like Andrew was explaining, identified that in the neoadjuvant setting, so it's really in the neoadjuvant setting first, the rate of response of the drugs that are currently being used is quite low. It's below 10%. But when you are looking at those non-responders, which is the majority of women being treated at the neoadjuvant stage, and you look at what could be the potential reasons for that, they found out that survivin was one of the most upregulated biomarker for resistant to treatment. So they found us. Really we didn't find them. But what we like very much about it, and you've heard us saying this many times, we believe that there are two things that are important for making T cell therapy work. The first one is creating a meaningful dose of T cells in the blood of patients, so controlling the pharmacokinetic which we are doing with our platform, DPX. And the second thing is targeting something in cancer that is really associated with the biology of cancer, something that plays a role in the evolution of cancer or resistance to treatment. And this is really the perfect case here for us. Not only we have all of these, but it's also in commercial line of setting, in a neoadjuvant setting where it's probably the best place for immunotherapy to be. And at the same time, the bar is quite low again in the neoadjuvant setting. I don't know, Andrew, if you want to add more on this.

[Andrew Hall:]

Yes, I’ll just add a little flavor. And I think it's important to recognize as a sort of a strategic driver for IMV now that the idea of following the biology with the high expression of survivin in this population that appears to be more resistant to treatment is a really compelling reason to go into this population. Commercially, it is the largest point in -- the largest size population in breast cancer and it's obviously very appealing for the reasons that Fred mentioned in respect to earlier lines of treatment are more immune-abled population and potentially a more available population as we understand that that late line in breast cancer is very competitive. But this idea of following the biology in a population where we will be able to collect tissue to do analysis and then maybe identify other solids that we can follow behind that is a really exciting step forward for this technology. And importantly, as we're now creating other therapeutics with other therapeutic targets, we’re glad to find an improved rationale for even further expansion of the IMV footprint beyond what we're showing with maveropepimut-S. So it's an excellent question and I think the observation that we're following the biology is important to reiterate.

[Kaveri Pohlman:]

Great. Thank you and congrats on the progress.

[Fred Ors:]

Thank you.

[Operator:]

Your next question comes from Joe Pantginis of H.C. Wainwright. Please go ahead. Your line is open.

[Joe Pantginis:]

Hi, guys. Good morning and thanks for taking the question. And sad to see Joanne go. Good luck in your next steps. So just continuing in the breast cancer vein here, wanted to just continue on talking about benchmarking. So first, with regard to the upcoming study, I know you talked about broadly the inclusion criteria, but what stages of diseases are the patients going to be? And then let me know if this is a fair statement since you talked about response rates being essentially under 10%. Is it fair then that any responses that you see above that based on the translational analyses that you'll be conducting could certainly implicate a role for the immunotherapy? And what would you consider to be a meaningful improvement of responses at this point? Thank you.

[Fred Ors:]

Thank you, Joe. Like we said, it's very early line of setting where women are typically treated with neoadjuvant aromatase inhibitors and sometime on the regimen chemotherapy depending on some specific analysis of the state of the tumor, and basically you don't see a lot of tumor down-staging or reduction, but it can certainly provide some benefits before the surgery. So that's really where this is used and has limited benefits other than like we’re adjusting for surgery. And so to answer your question, yes. The performance of immunotherapy, as you know, is the potential to early create an immune activation or immune response in patients who would like to improve the long-term outcomes of patients. And that's why we like to be really at this line, because that's where immunotherapy can really make a difference with what we like. And thanks for asking the question too is that yes, we will be able to see the activity of the T cell therapy on the tumors. We will be able to see the impact between the start of treatment and surgery, and see if T cell therapy can really make a bigger difference than what is currently used for neoadjuvant.

[Joe Pantginis:]

That’s helpful. Thank you. And if I could just shift gears for a second. I'll admit, maybe I'm just watching the news too much. And just talking about manufacturing and everyone's just so concerned about different supply chains in the United States or what have you and across the world. So you obviously have made the case about very low cost manufacturing for your assets, and that's very encouraging, especially when you compare against other types of immunotherapies or cellular therapies. So with that said, what could you consider any sort of rate limiting steps with regard to the manufacturing process that anyone might be concerned about or shouldn't be concerned about, even if it's like sourcing the peptides or anything external that might cause potential concern if there's ever any supply chain issues?

[Fred Ors:]

Well, first of all, I have to say that luckily, we are not experiencing any supply chain issues related to manufacturing and the reason is that the technology we are -- the drug delivery technology we are developing, it's a lipid nanoparticle technology. But the composition and the way it is manufactured is quite different from what is the source of supply chain issues in the world, which are both LNP technologies for mRNA vaccine. So if you think about the lipid composition, it’s different. All the elements that we're using are different with -- as you know, it was invented by the company and we own a very strong IP portfolio on this platform. And to my knowledge, we are really the only one in the world at this time developing a platform like this. So it protects us from those supply chain issues. On the peptide side of things, again, peptide vaccines are the next generation of vaccines, I would say. There's not a lot of peptide vaccine trends in development, so we don't suffer any supply chain issues related to peptide manufacturing. There's more than 100 peptides approved by the FDA, a lot of capacity in the world so we don't foresee that in the future there's going to be a limiting factor for manufacturing.

[Joe Pantginis:]

Got it. Fred, I really appreciate that color. Thanks a lot.

[Fred Ors:]

Thanks.

[Operator:]

. Your next question comes from Ted Tenthoff of Piper Sandler. Please go ahead. Your line is open.

[Ted Tenthoff:]

Great. Thanks, guys. And thanks for all the updates on all the progress. I wanted to ask about the 2b study of maveropepimut and KEYTRUDA in DLBCL. And again, sort of to get a better understanding of what you think the contribution of the low dose cyclophosphamide is, and I know that in that study, you have the single arm maveropepimut. If that ends up showing that cyclophosphamide is not really adding anything, would it be removed from other studies? And kind of how do you see cyclophosphamide fitting into the future there? Will that all be data driven? And are there differences between DLBCL maybe in the other indications? Thanks.

[Fred Ors:]

Thanks, Ted. So first answer -- first part of the answer is yes, we are testing the contribution of CPA in the design of the study. If we see contribution, we're going to keep low dose CPA in the treatment. It's a drug that's available. The safety profile is good. So it won't be a problem. If it doesn't show any meaningful benefit, then we'll simply remove it and we'll just keep maveropepimut-S and KEYTRUDA as the combination. There is a lot of preclinical science around the use of cyclophosphamide with other immunotherapeutic agents. However, we are the first to generate T cell therapy activity with this technology in DLBCL. So I believe that confirmation in human is really what should be the base for the decision, and that's what we are doing. Either way, there's going to be advance to market for the combination. Will this translate into the same thing in other indications? It's certainly something we're going to be looking at. But at the same time, like you said, there are important differences in the tumor microenvironment, for example, between, let's say, DLBCL and ovarian cancer, and that's where dose of chemotherapy can really help the T cells access the tumor, and it might not be the case in DLBCL. But, for example, it could be the case in ovarian. So we really want to base the decision on clinical data as we move forward for CPA.

[Ted Tenthoff:]

Okay, cool. Awesome. I appreciate it. I'm really excited to see more data coming this year.

[Fred Ors:]

Thank you, Ted.

[Operator:]

Your next question comes from Chelsea Stellick of iA Capital Markets. Please go ahead. Your line is open.

[Chelsea Stellick:]

I just have one or two quick questions just on the finance side. So I guess although the 30 million is sort of enough to fund operations through till the first quarter of 2022. I just kind of want to gauge further appetizing accessing the ATM again. And if so, what the use of the funds would be? I guess I'm just trying to get more clarity and specificity on future funding or funding for future operations.

[Fred Ors:]

Pierre, do you want to take that one?

[Pierre Labbé:]

Yes, sure. Thanks, Chelsea. For the use of the ATM, I think we don't have any specific plan to use it. It's a tool that is there that we can have access to if we believe that makes sense for the company in terms of share price and things like that. And that's how we used it in the past. So there's no guarantee that we will use the ATM in the next 12 months. So just wanted to mention that in the cash that we have and in the duration of the cash, we don't take into account any use of the ATM, but it doesn't mean that we won’t use it in the next few months.

[Chelsea Stellick:]

Okay, that’s fair.

[Fred Ors:]

Maybe, Andrew, do you want to add on the BD activities to that what we are doing with the platform? Andrew?

[Andrew Hall:]

Sorry, I was on mute. To make very clear, we have a healthy appetite for mechanisms that are non-dilutive in our funding as well. And I'm encouraged by the progress we're making in those discussions. I think for a company that is our size, we need to remain open to sort of the possibility of creating business development momentum. And as we create more therapeutic opportunities in our pipeline by sort of leaning into our technology as perhaps a drug delivery mechanism to create opportunities for other mechanisms that are maybe not peptide targets, we do start to open a revenue stream for non-dilutive opportunities through business development that is complementary to anything we will do through either an ATM or through other fundraising mechanisms. And it's an important element to balance the value of IMV in the midterm and the long term by an ultimate funding mechanism.

[Chelsea Stellick:]

Perfect. Thank you. I guess just one more question from me. With the growing headcount, what can we sort of expect for G&A over the next year?

[Fred Ors:]

Yes. For the G&A, we don't expect an increase in terms of headcount and costs related to the G&A because, as I mentioned, the increase that we saw in the first quarter was directly related to an increase in the insurance premium that we had in June of 2020. So nothing related to the addition of more people in G&A.

[Chelsea Stellick:]

Thank you. That’s all for me. And I'm looking forward to sort of the second half of the year when there's quite a few analyst events.

[Operator:]

There are no further questions at this time. I will turn the call over to Frederic Ors for closing remarks.

[Fred Ors:]

Thank you very much everyone for your time this morning and all the good questions, and have a good rest of the day.

[Operator:]

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