IMV Inc.
Q4 2020 Earnings Call Transcript

Published: 17 Mar 2021

[Operator:]

Good morning, everyone and welcome to the IMV Inc. Fourth Quarter and Year End 2020 Conference Call and Webcast. Please note that today’s call is being recorded today, Wednesday, March 17, 2021 at 8 a.m. Eastern Daylight Time. I would like to now turn the call over to Mr. Labbé, Mr. Pierre Labbé, Chief Financial Officer of IMV Inc. Mr. Labbé, you may begin.

[Pierre Labbé:]

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

[Fred Ors:]

Thank you, Pierre and good morning everyone. I hope you and your families are all doing well. And I am very pleased today to have the opportunity to share our progress and the steps we have ahead of our pipeline development in 2021 and beyond. Looking back, the extraordinary year that was 2020, I would like to start first by saying thank you to all our employees and partners for their commitment to continue to provide our immunotherapy cancer patients with high unmet medical needs and will continue to require new options of treatment. In this challenging time, we have made significant progress in our programs, delivering some of the best results in the industry for T-cell therapy in cancer. And more than ever, we remain committed to our goal of making our treatment available to patients with a sense of urgency and audacity, but always based on the most robust science. In that respect, I am really proud today to share with you the generic name of our first product, Maveropepimut-S, formerly known as DPX-Survivac, not only this new name underline the audacity of our science, but it is also a stepping stone for us on our path to market.

[Joanne Schindler:]

Thank you, Fred and good morning everyone. I am going to start with an update on the SPiReL study. This is an investigator-initiated Phase 2 study evaluating Maveropepimut-S and low dose cyclophosphamide, or CPA, in combination with Merck’s anti-PD-1 checkpoint inhibitor, Keytruda and DLBCL. Last November at the Annual Meeting of The Society for Immunotherapy of Cancer, or SITC, lead investigator, Dr. Neil Berinstein and his colleagues from the Odette Cancer Center at Sunnybrook Health Sciences Center in Toronto, reported they had identified PD-L1 as a potential biomarker of clinical response in patients with relapsed or refractory DLBCL in this combination trial.

[Andrew Hall:]

Thank you, Joanne. Good morning, everybody. I wanted to spend just a few minutes this morning walking through the IMV vision of the DLBCL market. So, in line with regulatory guidance, our plan is to investigate Maveropepimut-S in combination with Keytruda in late line patients. This represents a fast-to-market strategy and is now clearly a strategic goal for the company as our first launch opportunity for Maveropepimut-S. What I am more interested in sharing with you is the opportunity based on the profile we have seen through the SPiReL study of the balance between efficacy and safety that provides this product in combination with Keytruda the opportunity to progress to earlier lines of therapy and potentially to move towards an opportunity in maintenance within this disease space. As is clear from the epi in DLBCL, any movement out of third line creates a significant commercial opportunity, one that we look forward to exploring as we progress this product forward towards market. I would also like to spend just a minute to remind everyone of the unique value that Maveropepimut-S presents as a novel therapy for oncology. Fred touched on some of these points earlier, but I think it is worth reminding everyone that with a unique mechanism of action, there is potential to be synergistic with other immunotherapies in oncology. We have demonstrated that in the SPiReL study in DLBCL with Keytruda. We have also demonstrated positivity in the basket study that Joanne just illustrated, but the mechanistic synergy doesn’t need to end there. And because of the favorable safety and tolerability profile that we have demonstrated both in our monotherapy trials as well as our trial in combination with Keytruda, we are confident that the opportunity to combine this therapy with other immune therapies will be part of the lifecycle management plan for Maveropepimut-S. I would also like to remind everyone that this is a subcutaneous administration that can be stored at room temperature with an extended shelf life that enables broad utility without the complications that we know some therapies in oncology present. And finally, this is relatively easy to make and extremely cost effective. In a world where therapies for oncology are creating price points that are significant, this presents IMV with the unique opportunity to potentially disrupt the market on a pricing strategy. Clearly, our clinical data will need to readout for us to inform that strategy, but I think it is important to remind everyone that the uniqueness of this product profile goes far beyond just the clinical dataset that we have demonstrated so far.

[Pierre Labbé:]

Thank you, Andrew. Before I start, I just want to remind you that all the numbers that I will be discussing are in Canadian dollars. So for 2020, our R&D expenses were at $26.6 million, an increase of $7.6 million over 2019. The $7.6 million increase is mainly due to a rise in expenses related to the ongoing basket trial, the personnel cost due to an increase in headcount and preclinical development of our DPX-COVID-19 vaccine candidate. The R&D expenses for the development of our DPX-COVID-19 were offset by new government assistance. The government assistance totaled $6.7 million in 2020. It’s an increase of $4.2 million compared to 2019. And as I just mentioned, the increase is mainly explained by the various government grants that we received for the development of our DPX-COVID-19 candidate. The G&A expenses were $15.2 million for 2020 compared with $10.1 million in 2019 and the increase is mainly attributable to higher insurance premium for $2.7 million to an increase of $1.3 million in exchange loss and an increase of $0.7 million in non-cash ESU compensation. The net loss and comprehensive loss was $34.9 million or $0.58 per share for 2020 compared to $27.4 million or $0.55 per share for 2019. As of December 31, 2020, the company had cash and cash equivalents of $46.4 million compared to $14.1 million at the end of 2019. And based on our current operating plan, actual cash is expected to fund operations for the next 12 months. Cash and cash equivalents increased by $32.3 million in 2020. We used $34.8 million of cash in our operating activity and $0.4 million in investing activity. At the same time, our financing activities generated $67.5 million. The cash generated by financing activity came primarily from the $25.1 million private placement that we completed in May 2020 and by the gross proceeds of nearly $41 million from the At-The-Market facilities that we had in place and by $2.3 million coming from the exercise of common share warrants. As of March 16, 2021, the number of issued and outstanding common shares was $67.7 million and a total of $5 million stock options, DSUs and warrants were outstanding at that date. Finally, and as mentioned in the introduction, the corporation’s audited annual consolidated results of operations, financial condition and cash flows for the year ended December 31, 2020, and the-related management discussion and analysis are available on SEDAR, on EDGAR and on the company’s website as well. So thanks for your attention. And I will now turn the call back over to Fred for his closing comments before the Q&A session. Fred?

[Fred Ors:]

Thank you, Pierre. I hope you all appreciated the significant progress IMV realized on multiple fronts in 2020, especially the compelling data we presented at the end of the year in our oncology program in both DLBCL and ovarian cancer. In addition to that, we also achieved significant financial and operational milestones, including welcoming new key employees and directors, such as Andrew Hall as Chief Business Officer. We are very happy to have him onboard. And Director Michael Bailey, who is the President and CEO of IBO Oncology, which we – which just recently got FDA approval in renal cell carcinoma. Happy to have Michael on board as well. Looking ahead of 2021, we anticipate this midterm being an important point for IMV – in IMV’s evolution as we had down the registration path and further advance our lead compound Maveropepimut-S in relapsed/refractory DLBCL, late-stage ovarian cancer and other solid tumor indication while we’ll continue to expand our pipeline – sorry, to include our first dual-targeted T-cell therapy in bladder cancer. We continue making progress on looking the full potential of our platform, DPX, in our quest to deliver effective, tolerable and easy-to-handle immunotherapies to patients who have to treat sensors. We are grateful for the continued support of all our stakeholders, partners, shareholders and employees. Thank you for your Attention. Operator, we now are ready to take questions.

[Operator:]

Your first question comes from the line of Tom Shrader from BTIG. Your line is now open.

[Tom Shrader:]

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

[Fred Ors:]

Joanne, you want to take that one, please?

[Joanne Schindler:]

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

[Tom Shrader:]

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

[Joanne Schindler:]

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

[Tom Shrader:]

Okay, great. Thanks. Sorry for the early questions.

[Operator:]

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

[Joe Pantginis:]

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

[Fred Ors:]

I will start, Andrew and then maybe you can complement. Thanks for this question, Joe. It’s, I think, a very important point for this technology and for us as a company. So I – sorry, it’s the first asset we are developing, and we’re really – like I said in my introduction, are generating one of the best results in T-cell therapy. But the way we are looking at this technology is exactly in line with what you were just saying. We have done some demonstration that we could combine a very high number of different targets in one formulation. I think we went up to for a few targets at some point. So it’s a very flexible technology, and that is very cost-effective, like you were adjusting that cleanly giving us this flexibility and opportunity to venture into targeting cancer from multiple angles that could potentially work together in making a very strong T-cell therapy and it’s really where we see the blue sky and the future of this technology going. And SurMAGE is really the first – we’re going to provide the first clinical look at the benefit of combining two different attacks on a tumor with two different targets that could act with complementarity. Andrew, I don’t know if you want to add on that?

[Andrew Hall:]

Thank you, Fred, and thanks, Joe, for the question. So to get back to the point of manufacturing simplicity, but from an economics perspective, manufacturing cost, because of the relatively – and I don’t want to belittle the process because there is a lot of technological know how that goes into it. But because of the relatively straightforward process and the relatively expensive process of combining the DPX technology with the therapeutic targets that we’ve investigated so far, we do have a, really, what I consider to be unique ability in this market to make some interesting commercial choices with respect to market disruption on our entrance strategy. And so your point is very well made, Joe that we believe this is one of the advantages of the DPX technology as it relates to Maveropepimut-S. But we also recognize that, that advantage can be carried through all of our pipeline and potentially beyond the peptide targets that we’ve so far identified in our pipeline.

[Joe Pantginis:]

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

[Joanne Schindler:]

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

[Joe Pantginis:]

Got it. Pretty straightforward. So thanks a lot guys.

[Fred Ors:]

Thanks, Joe.

[Operator:]

Your next question comes from the line of Paul Stewardson from iA Capital Markets. Your line is now open.

[Paul Stewardson:]

Hi, guys. Thanks for taking my questions. Just calling for Chelsea, in terms of the ovarian cancer strategy, can you give us a bit of a directional sense of how close it came to the success threshold in the basket trial? And in terms of – would you consider other combinations or is this – how does this relate to the monotherapy, where you can go from here in different combo possibilities?

[Fred Ors:]

Thanks for your question. The basket trial, the goal of the basket trial was really to explore where the combination between healthy cell therapy and a checkpoint inhibitor, in that case, pembrolizumab or Keytruda would really make a difference. So we set up ambitious objectives in all those indications. And we are very carefully selected indications from ovarian where pembrolizumab has very limited activity to bladder in MSI-high, where there is more activity. And the idea was really to better understand where we should focus the development of the combination. So for us, the fact that it didn’t meet the threshold for ovarian in a way, it’s not too surprising given it was one of the indication in that basket that where pembro had limited activity. And also you have to consider that PD-L1 exploration, generally speaking, in ovarian cancer is pretty low. So what it tells us, and I think Andrew highlighted that, and I did too in my introduction that we have a T-cell therapy that has a very favorable safety profile. And the number of combination we can do with this technology because we are not adding toxicity is very broad. And what – you can start – we are starting to conclude from the number of clinical studies we’ve done now is that there are indications where it can be applied as monotherapy, and there is no value adding a checkpoint inhibitor. There might be value adding another type of treatment. And there are other indications where clearly the combination of the checkpoint inhibitor and the T-cell therapy is making a big difference like the DLBCL, potentially MSI and bladder. And that’s where we want to focus the combination with checkpoint inhibitors. For all the indications, we’ll go as single agent or we’ll combine with other cycle treatment.

[Paul Stewardson:]

Okay, thanks. And just kind of a quick follow-up, do you have a sense of timeline for when we’ll start to see kind of more comprehensive data from the basket trial in terms of interim results?

[Fred Ors:]

What we would like – what we want to do is really, like Joanne was saying, there are so many considerations you have to integrate before you make a decision to pursue a combination like this in a solid tumor. It’s not only the objective response rate. Obviously, you have to look at the duration. You have to look at the PD-L1 expression. You have to look at whether those patients previously received checkpoint inhibitors or not. And we don’t want to necessarily rush into another potential relation trial even we are advancing DLBCL and ovarian. And we really want to take the time to make the right decision with our partner, Merck on that case, to where we should focus the development in solid tumors. So it’s difficult for us to provide guidance exactly on when we’ll be positioned to make a publication, we’d like to publish the results rather than providing interim results by this. But when we reach enough compelling evidence that there is a very strong rationale, for example, to select 1 or 2 indications and move them into the next trial, that’s where we will update the market and publish the results.

[Paul Stewardson:]

Okay, great. Thanks guys.

[Operator:]

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

[Andre Uddin:]

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

[Fred Ors:]

Hi, Andre, thanks for the question. I’ll let Andrew answer that one. Andrew?

[Andrew Hall:]

Thanks, Fred, and thanks, Andrew, for the question. As far as where we are at, we are in the exploratory mode. We have, I believe, four unique pillars for business development opportunity. Clearly, there is a licensing collaboration opportunity for the in-clinic products. We have a relationship with Merck that we look forward to exploring and developing in DLBCL, for Maveropepimut-S. We obviously are bringing forward some age into clinic. And we look forward to proving that product both in monotherapy and potentially in combination therapies. If it sounds like this is an advertisement for business development, perhaps it is. But also, we recognize that our platform of DPX technology can go far and beyond the targets that we have in our own pipeline. And so I think that there is a very fertile ground for business development. I will say that since joining IMV, we’ve evolved our both appetite and strategic skill set to that end, goal significantly. And I would hope that through 2021, we can communicate materiality in our business development strategy as it relates to collaborations and partnerships.

[Andre Uddin:]

Okay, thank you.

[Operator:]

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

[Fred Ors:]

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

[Operator:]

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