IMV Inc.
Q2 2020 Earnings Call Transcript

Published: 12 Aug 2020

[Operator:]

Good morning ladies and gentlemen. Thank you for standing by and welcome to the IMV, Inc. Announce Second Quarter 2020 Financial Results and provides Corporate Updates 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. [Operator Instructions] I would like now turn the conference over to your speaker today, Pierre Labbé, vice President and Chief Financial Officer. Please go ahead.

[Pierre Labbé:]

Thank you, Julie. Good morning ladies and gentlemen. My name is Pierre Labbé, I'm CFO at IMV. I am 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 who 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, 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 also on EDGAR. The press release, the MD&A, and the financial statements are all posted on our website, at imvinc.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 certified analysts at the end of the call. Now, I'm turning the call over to Fred. Fred?

[Frederic Ors:]

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 advancements of our COVID-19 vaccine candidate, and very promising data clinical results in our oncology program. Starting with our recent realizations around DPX-COVID-19 candidate, we are anticipate [ph] that Health Canada has recently agreed on our proposed Phase 1 clinical study design that is including the allotted population. This study is a randomized controlled study assessing the safety and immunogenicity of DPX-COVID-19 in 84 healthy adults across two age groups, one with adults aged between 18 to 55 and another one with adults over 56. For each cohort two dose levels will be tested. Enrollment will happen at two sites in Canada and we are expecting to get final approval to initiate vaccination of subjects before the end of the summer. Our vaccine is formulation of the DPX platform with four complementary peptide antigens selected for the high immunogenicity and ability to bind non-overlapping areas our review on the virus attack 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 T-cells in vitro and suggested to potentially reduce vaccine-induced immunity. This means that our vaccine candidate would retain its potential efficacy and dependency from current or future mutation of the virus at the site, as well as at other sites outside of the four 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 vaccine against IV that we're 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 1, we've also completed the trend manufacturing practice formulation and manufacturing process, development support Phase 2 and beyond, and this include the successful production of multiple batches at IMV. We are doing this development in very close collaboration with the Canadian government with supporting our Phase 1 without close to CAD5 million of non-dilutive financing. Our Phase 1 preliminary results will become available later this fall and assuming they are successful, we aim to initiate the Phase 2 clinical trial shortly thereafter, and continuing to set up manufacturing. To fund this continued initiatives, IMV has already submitted auto grant application through relevant authorities and has also engage in discussions with doctors in other countries. I will now review our most recent results in oncology. At our last quarterly update in May, we announced that SPiReL study if DPX-Survivac combination regimen and with Keytruda in patients with relapsed/refractory DLBCL and met its primary efficacy endpoint 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 therapies in clinical development with respect to efficacy, safety, and ease-of-care. We anticipate presenting topline data at 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 possible presentation that the American Society of Clinical Oncology, ASCO, on our Phase 2 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 the 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 with survivin-specific T-cell clones infiltrating tumors as early as day 56 following treatment with DPX-Survivac. As of the cut-off date on May 2nd, 2020, 19 patients were available for efficacy and four patients or 21% still receiving treatment. Five out of 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 warrant further clinical development for DPX-Survivac in this indication. Finally, a quick update on our Phase 2 Basket trial in multiple advanced metastatic solid tumors. As of August 3rd, a total of 100 patients out of the planned 184 patients were enrolled across all five 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 [Indiscernible], our At-the-Market facility had a product replacement during the quarter. We ended the quarter on our strongest financial position ever, but I will let Pierre further expand on this later on the call. This financing realized during challenging time will significantly expand our cash rate and position as 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'll continue to deliver on IMV's great opportunities. And this concludes my call. I will now turn the conference over to Pierre for review of our financials. Pierre?

[Pierre Labbé:]

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 net and comprehensive loss of CAD7.3 million or CAD$0.13 per share, which compares to a net loss and comprehensive loss of CAD5.1 million for the quarter ended June 30th, 2019. This is mainly explained by an increase in R&D expenses of CAD1.5 million for the quarter ended June 30th, 2020 compared to 2019. This increase comes from higher clinical costs related to the Basket trial and also higher personnel cost reflecting an increase in net count. It is was partially offset by a decrease in travel expenses and also lower clinical costs related to the DeCidE1 Phase 2 study of DPX-Survivac in patient with advanced recurrent ovarian cancer. We had an increase of G&A expenses in the quarter CAD800,000 compared to last year. This is mostly explained by an increase in insurance, higher legal and professional fees and also higher non-cash DSU compensation partially offset by a decrease in travel expenses, resulting from the COVID-19 travel restriction. For the six months period ended June 30th, 2020, our cash burn rate was [Indiscernible] the net loss for the period adjusted for operations not involving cash was CAD15 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 CAD6 million per quarter. As of June 30th, 2020, we add approximately CAD30.6 million of cash and potential sources of cash, which does not include the additional funding for development around DPX-COVID-19 that was awarded after June 30th by various governmental organizations in Canada. Also after June 30th, we sold under our At-the-Market facility 4.8 million shares for gross proceeds of $24.5 million with or CAD33.5 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 at approximately CAD68.1 million in existing in identified, so sources of cash at the end of June. IMV is in the best financial position it has ever been. And as of August 11th, 2020, the number of issued and outstanding common shares was 66.5 million shares and a total of 5 million stock options differed share units and warrants were outstanding. Please take note that our financial statements for the treatment period ended June 30th, 2020 and the related M&NA 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 remark.

[Frederic Ors:]

Thank you, Pierre. As you can see, we've 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 put us in a position to deliver preliminary Phase 1 results this fall and then potentially initiating a Phase 2 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 2 studies in DLBCL ovarian and Basket study in other solid tumor indication. As these results emerge, we plan to further engage with regulators on the design of potential people to files 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:]

Thank you. [Operator Instructions] Thank you. Your first question comes from line of Jim Birchenough with Wells Fargo. Please go ahead.

[Jim Birchenough:]

Hi Guys, can you hear me?

[Frederic Ors:]

Yes. Good morning Jim.

[Jim Birchenough:]

Yes, good morning. Congrats on all the progress. A couple of questions just maybe starting on the DPX-COVID-19, what [Indiscernible] to do before starting the Phase 1 and maybe remind us of the timeline 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 it prepares to data you've seen published some other vaccine in this Phase?

[Frederic Ors:]

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 we are -- as you know we're working in a very compressed timeline. So, the requirements for starting 1 one are really outside of what would be usually required for that. And they've allowed us to have a continuous discussion, you know, kind of a rolling file application to start with Phase 1 rather than the typical finding your outdoing. So, that's why we are agreeing on all the things that have to be completed before we initiate vaccination. But like I said, we believe that at this point that we'll be able to initiate vaccination before the end of the summer. The -- 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 approach and definitively on IMV side, we are not willing to place on the pressure, regulatory authority just to go faster.

[Jim Birchenough:]

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?

[Frederic Ors:]

Yes, well, the, both parts of your question will be my answer, as we -- 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 this comparison; 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 eight weeks and 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 would be in there. So, hopefully this will come close to the initiation of the vaccination in humans. I think -- gee, man, I know [Indiscernible] with me, but in terms of comparison, the important things for us in 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 assays. But generally speaking, we feel that we have a vaccine that is at least equivalent to anything else that have been published or shown in the space. And that based on our clinical experience with RZ, that vaccine stands a good chance to provide the differentiation in two aspects, which I believe is my personal opinion, but which I believe will be the most important aspects or consideration of -- 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, how the -- what else 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 two areas, where the most importantly 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 1, so that we can -- we can potentially highlight the potential benefits of the approach that we taken with DPX-COVID-19.

[Jim Birchenough:]

Great, thanks for taking the questions Fred. And congrats again on the progress.

[Frederic Ors:]

Thank you, Jim.

[Operator:]

And your next question comes from line of Ted Tenthoff with Piper Sandler. Please go ahead.

[Ted Tenthoff:]

Great. Great morning, Fred. Good morning, Pierre. Congrats on the success.

[Frederic Ors:]

Hey, Ted.

[Ted Tenthoff:]

So I'll -- I appreciate the progress on the COVID, SARS-CoV-2 vaccine and 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'll be data dependent. But just to try to get a sense for sort of what how you're preparing for success. Thank you.

[Frederic Ors:]

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

[Joanne Schindler:]

Hi, Ted, and everyone here. Thank you for the question. Yes. So it's a -- it is data dependence, of course. So what we are currently doing is bringing in all that data to better understand the -- 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 advisors 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 the steps that just talked about.

[Ted Tenthoff:]

Cool. And then is it potentially could be a registration study for those two indications based on the success we've seen are a little early to say?

[Joanne Schindler:]

You know, 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.

[Ted Tenthoff:]

Yep. Perfect. Thanks, Joanne. Thanks, everybody.

[Joanne Schindler:]

Thank you.

[Operator:]

And your next question comes from line of Joe Pantginis with H.C. Wainwright. Please go ahead.

[Joe Pantginis:]

Hey, good morning, everyone. 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 2, but I wanted to focus on the long term. If the vaccines 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?

[Frederic Ors:]

Thanks for the question Joe. Good morning. Yeah. So, we have been, we actually have been using CDMO time before for quite a long time, we have CDMO’s in the U.S. We have CDMO’s in Canada. And you know, related to COVID-19, what I said is that, you know, we started discussions for with potential partners in other countries, something very different between the DPX-Survivac and COVID-19 is that you know, with COVID-19 there is a very strong willingness in -- in a lot of countries to have domestic manufacturing, especially, I would say that the feeling each. One of the, key advantage that we have with DPX COVID-19 as a reminder, this is a fully synthetic actions. They're a very simple process of manufacturing. And you know, it's very portable, so it means that in any country of the world -- country or even an emerging country of the world, they are out there in the facilities with lyophilization [ph] capacity that could DPX COVID-19.. So we have that in Canada with our CDMO. We have that in the U.S. with our CDMO. And again, you know, we were planning to expand in other countries. The great thing for the company and I want to be careful what I said about , reporting 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 in a way for bringing the process of manufacturing to Phase 3 valuation 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 would have the potential to move into potentially several registration trial Phase 2b 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 working towards being done with COVID-19 it's going to be contributing actually, the plan we initially had for DPX-Survivac so that's -- that's really, a great opportunity for the company to actually accelerate, manufacturing development for -- for oncology as well.

[Joe Pantginis:]

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

[Frederic Ors:]

So just, just repeat the question, Joe, just to make sure I understand you, you're asking about, additional translational data on T-cell response across our studies, and I will get linked with yet with clinical responses.

[Joe Pantginis:]

Yes.

[Frederic Ors:]

While you know, at ASCO, we provided additional information on this, but, definitely for us, and you’ve been following us for a quite some time, you know, it has always been a very important consideration. As I've said repeatedly myself that, one of the missing you know, demonstration of space, with cancer vaccines or any technologies in the immune system was this ability to prove that you can generate two variations. And, this was a major goal 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 engineering tumor regression and I believe that we've made this demonstration very clearly, ovarian cancer. And this is one of the best, first demonstration of that. This is the proof that you have an active product. And oncology development, that first proof that you have an active --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 had activity and it includes, T-cells. So we've always done it, we'll continue to do it. So you will, 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.

[Joe Pantginis:]

Got it. Thank you very much, and be well, everyone.

[Frederic Ors:]

Thanks Joe.

[Operator:]

Your next question comes from the line of Mayank Mamtani with B. Riley FBR. Please go ahead.

[Sahil Kazmi:]

Hi, good morning. This is Sahil on for Mayank. Congrats on all the progress. Just a couple of brief questions for us. As you think about this upcoming Phase 1 sort of interim look at the COVID-19 program. Could you give us a little more color and how we should think about some of the previously generated data and I'm thinking that CDA 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 1 study? And then maybe taking it a bit step further, what would trigger the Phase 2? Thank you.

[Frederic Ors:]

Thanks, Mayank. So, we know that there's been a lack 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 1 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 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 two most important parameters in my view at this point and we are planning to report exactly those two things. Beyond that, the T-cell contribution to protection, I think it's an important consideration and its thing that is complementary to the antibody response. But if you look at the very long history of vaccines, there has never been a clear correlation. I mean, in a fully controlled clinical study, where people are -- we're trying to show correlation between CDA T-cells -- our clinical T-cells and protection, it was never successful. So, in my view, on this we discover something new with those programs. I think that the T-cell component is going to be an additional information provided, but the real surrogates 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 target selection. And the goal of the approach we had is to improve duration and to improve the potential efficacy of the vaccine [Indiscernible] population. So, for us, as we move through Phase 1, 2, 3, we'll be paying a lot of attention to those two criteria, as we report the clinical results hopefully, between now and the end of the year.

[Sahil Kazmi:]

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 1 study? Kind of thinking of later stage development and how you're thinking of capital expenditure moving forward in general would be helpful. Thank you.

[Frederic Ors:]

Yes, so like I said, we have been 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're arguing, they want to sign 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 actions, whether they be [Indiscernible] 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, we are in close collaboration with them, listing in 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 scale of manufacturing in Canada and Phase 2, 3 clinical trials.

[Sahil Kazmi:]

Great. Thanks for taking our questions.

[Operator:]

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

[Frederic Ors:]

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.

[Operator:]

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