IMV Inc.
Q2 2018 Earnings Call Transcript

Published: 11 Aug 2018

[Operator:]

Good day, ladies and gentlemen, and welcome to the IMV Second Quarter 2018 Earnings Call. [Operator Instructions] As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Mr. Pierre Labbe, CFO. You may begin.

[Pierre Labbe:]

Thank you, Catherine. Thank you, everyone for joining us today on the conference call. I'm Pierre Labbe, CFO at IMV. Joining me on the call today, we have Fred Ors, our CEO. And also for the Q&A session, Dr. Gabriela Nicola Rosu, our Chief Medical Officer; and Marianne Stanford, our VP, Research will be available to answer your questions. Before we begin, I would like to remind you that except for historical information, this presentation contains forward-looking statements, which reflects IMV's current expectations regarding future events. These forward-looking statements include, but are not limited to statements regarding our collaboration with Incyte Corporation, our expected cash burn rate and cash funding, the expansion of our clinical program and the reporting of clinical data from trials. These forward-looking statements involve known and unknown risk and uncertainties that could cause IMV's actual results to differ materially from those statements. Those risks and uncertainties include, but are not limited to, our ability to access capital, the successful timing 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 annual information form. The forward-looking statements in this presentation are also based on a number of assumptions which may prove to be incorrect. Forward-looking statements contained in this presentation represent views only as of the date of this presentation 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 from time to time by or on its behalf, except as required under applicable securities legislation. Investors are cautioned not to rely on these forward-looking statements and are encouraged to read IMV's continuous disclosure documents, including its current annual information form, as well as its audited annual consolidated financial statements which are available on SEDAR and on EDGAR. I will now turn the call over to Fred.

[Fred Ors:]

Thanks, Pierre. Good morning. Thank you all for joining us to discuss IMV's second quarter earnings results. I will start with a brief update on our clinical development programs and other business highlights and then I will hand it back to Pierre for a review of our financial results. Second quarter was a busy quarter for the company, both clinically and operationally, but I will start by discussing the clinical milestones. For DPX-Survivac, new positive data was highlighted in an oral presentation at the 2018 American Society of Clinical Oncology or ASCO Annual Meeting. Dr. Oliver Dorigo, who is Director and Associate Professor of Gynecologic Oncology at Stanford University Medical Center made the presentation of data from the phase Ib/2 DeCidE1 trial combining DPX-Survivac low dose cyclophosphamide with and without epacadostat in ovarian cancer. This program is in collaboration with Incyte. As a reminder, this trial is an open-label safety and efficacy study for women with advanced platinum-sensitive and resistant ovarian cancer. The Phase Ib portion has two dosing course of epacadostat. The first is with 100 milligram dose of epacadostat twice daily; and the second 300 milligram dose twice daily. At the time of data cut-off for the ASCO presentation, 39 patients were enrolled, including 25 in the 300 milligram cohort, with 8 evaluable at day 56 first CT scan. The data showed 7 tumor regressions, including 4 Partial Responses or PR in the first 18 evaluable patients across both dosing cohorts. Partial response is defined as being at greater than or equal to 30% decrease in tumor lesion size. Importantly, mechanism of action and analysis from the ASCO data showed that DPX-Survivac generated survivin-specific T cell responses in 100% of, 10 out of the 10, evaluated patients and that infiltration of T-cells in the tumors correlated with tumor regressions and clinical responses. We believe this is significant as it is the first clinical demonstration of the mechanism of action of DPX-Survivac, showing its unique capacity to trigger tumor regressions in difficult to treat solid tumors such as ovarian. We were also excited to announce the expansion of the ongoing clinical collaboration with Incyte with the addition of a Phase II cohort. The new portion of the program is to evaluate DPX-Survivac and low dose cyclophosphamide with and without epacadostat, in patients with advanced recurrent ovarian cancer. The goal here is to evaluate the clinical contribution of each investigational drug in the combination regimen. The Phase II arm of the study conducted under an amendment to the existing collaboration in which IMV and Incyte are co-funding the trial. Moving now into the operational highlights of the quarter. We are also pleased to have made some significant advancement on that front as well. IMV listed on the NASDAQ and its shares commenced trading on the NASDAQ stock exchange on June 1 this year. We underwent a corporate name change to underscore that the underlying mechanism of action of our DPX-based therapies are truly novel and a new class of immunotherapy that is different from vaccine technologies. Lastly, we're happy to announce that Julia Gregory joined IMV's Board of Directors. Julia previously was the Chief Executive Officer and Board Member of the Immuno-Oncology company, Five Prime Therapeutics, and is an experienced biotechnology executive. With that as an update, I will now ask Pierre to review our second quarter financial results. Pierre?

[Pierre Labbe:]

Thanks, Fred. As I present the financial overview, I just want to remind everyone that all the numbers that we'll be discussing are in Canadian dollars. The net loss and comprehensive loss for the second quarter was 5.2 million, representing $0.12 per share. R&D expenses of 2.6 million increased by 1.3 million for the 3 month period ended June 30, 2018 compared to 2017. These increases primarily reflect the two new phase II clinical trials collaboration that we have with Merck in ovarian and diffuse large B-cell lymphoma or DLBCL, which started in 2018. And we also have some costs related to the preparation of the upcoming basket trial. G&A expenses of 2 million increased by 1.2 million for the three months period ended June 30, 2018 compared to 2017. These increases are mainly explained by the various expenses related to the NASDAQ listing and we have legal, audit, consulting fees and also listing fees that are non-recurring expenses. The filing of a shelf prospectus and the increase in patent fees also explain these increases. For the first half of 2018, IMV's cash burn rate was 7 million. Based on the current business plan, we forecast the cash burn rate to be between 3.5 million and 4.5 million for each of the last two quarters of 2018 and it's going to depend on the timing of certain clinical expenses. As of June 30, 2018, the company had cash and cash equivalents of 25.1 million, compared with just under 15 million as of December 31, 2017. We estimate that the company is well funded with cash until Q4 of 2019. As of today, the number of issued and outstanding shares is 44.9 million and 46.9 million on a fully diluted basis. I would now like to ask Fred to make some closing remarks. Fred?

[Fred Ors:]

Thanks, Pierre. We made great progress in the second quarter and reached several important milestone as we work towards delivering novel immuno-oncology therapeutics in hard to treat patient populations like recurrent ovarian cancer, where patients have had limited treatment options up to this point. Our intent is to deliver best-in-class T cell activation technology using our DPX platform. We think the next six months should be profitable for IMV. To summarize our anticipated upcoming clinical milestone over the next four quarters, we expect to expand our clinical program with a new phase II basket trial in 5 solid tumor indications; report topline data from the higher dosing cohort in our clinical trial with Incyte; report preliminary and top line data from our triple combination Phase II trials with Merck in DLBCL; and report preliminary and top line data from a second triple combination Phase II trial with Merck in ovarian cancer. We look forward to updating you on these additional events. And I'd like to thank you for being on the call today. Catherine, we are now ready to take questions.

[Operator:]

[Operator Instructions] And our first question comes from Laura Engel with Stonegate Capital.

[Laura Engel:]

Just wondered, looking at the press release and some of the information that you provided, you listed some highlights and milestones that might happen over the next four quarters, but then you also detailed some information on the cash burn. Could you give us more insight into what might occur prior to yearend and maybe just given the cash burn, should we assume that some of the expansion of the clinical trials will may be fall in early 2019?

[Pierre Labbe:]

I can answer the first part. It's Pierre here. On the cash burn, when I say that for the last two quarters, we expect the cash burn to be between 3.5 million to 4.5 million per quarter, it includes the beginning of the basket trial that we expect to announce soon.

[Laura Engel:]

Okay. And then just as far as the information presented at ASCO, the T Cell infiltration post treatment in the 37%, can you just tell us a little bit for those events who are in a scientific, just the significance of that, just with these being the most recent results, what you expected versus what was achieved in this most recently released data and how significant that is, how we should view that information?

[Fred Ors:]

I will begin the answer and will ask Marianne to give a more detailed explanation. I just want to say that for us, Laura, proving the mechanism of action of our product is very important, because we believe that once you've proven the activity of a drug, you know what remains to be done after, so the clinical development. So T cell infiltration was very significant milestone for us to be able to show that it was happening. So Marianne, can you explain very simply why this is very critical for our product and technology. Marianne, you are on mute may be. It looks like we have a problem with Marianne. I'll say this one for you, Laura. So if you look at the mechanism of action of DPX-Survivac, there is really three main steps. The first one is to generate survivin-specific T cell in the blood but they are in the blood and don't do anything. It's not really useful for the activity of the drug. So the next step is really for those T cells to move to the tumors wherever they're in the body and start infiltrating entering the tumor and it's something when they do that that they're able to have the killing effect that T cells have, so they start killing those cells within tumor and trigger that in regulation that's associated with clinical benefits. So that T cell infiltration is early, the second key step of the mechanism of action and what we have shown at ASCO is that, about 100% of patients who do have a high level of T cell in the blood, but only those where there is T cell infiltration, strong evidence of T cell infiltration get to tumor patients and clinical benefits. So it was very clear evidence of the mechanism of action of DPX-Survivac.

[Marianne Stanford:]

I'm sorry. My line was muted. And I hit the wrong button. But I think Fred answered all the question.

[Operator:]

And our next question comes from Endri Leno with National Bank.

[Endri Leno:]

Just a couple for me. It's more about timelines. You mentioned several milestones that you would present over the next six months or even next four quarters. I was wondering if you can possibly like narrow it down a little bit. I mean I think we've talked previously about Q3 milestones in terms of having some preliminary results with Merck and perhaps even the initiation of the basket trial as well as the announcement of the partner for the basket trial. Do those timelines still stand for Q3?

[Fred Ors:]

Yes. They still stand.

[Endri Leno:]

And on the initiation of that basket clinical trial, is it possible to expand a little bit on what stage of it, have you identified the indications yet and I mean, have you talked to committees, has any patient recruitment started ta all or?

[Fred Ors:]

So, as you can imagine, it's a combination trial with our partner. So there are some complexities in to putting in place all the agreements with the partner and with the clinical sites and that's why basically we decided that we would wait for having all those agreements in place before making the press release, but I want to reinsure you and investors that we've been working on this trial for a while and when we're going to make the announcement is because we're going to be very, very close to the point of having the first patient enrolled in the trial.

[Endri Leno:]

So it also means that the indication has been chosen and the decision has been made on that?

[Fred Ors:]

The clinical sites have been selected and all of that.

[Endri Leno:]

And I'm assuming also that the partner has been finalized? I mean, we're just waiting to.

[Fred Ors:]

Yeah.

[Endri Leno:]

Okay. Thank you. And one point I would like to further clarify on the basket single trial, will this be run primarily by IMV or is there going to be a third-party investigator, similar to the trial that you're running with Merck currently?

[Fred Ors:]

No. We - it was very important for us. Actually, thanks for this question. It was very important for us, for this trial to be a company sponsored trial. Investigator sponsored trials are great. They provide more opportunities for the company to test the product in different indications, but there is also the fact that they are run by people aside of the company and so you have the same level of control on the progress and the possibility to update the market on clinical results. So we - Incyte trial is run by IMV and we really wanted the basket trial to be run by IMV and that's the gate.

[Endri Leno:]

And just one very last question for me, the trial sites, they're both US and Canada? I'm just trying to gauge cost wise. I mean, what are your costs?

[Fred Ors:]

Yes. We always run our trials in both US and Canada, US being really the country where we are planning to file for our first market approval.

[Operator:]

[Operator Instructions] And we have a question from Carol Werther with Dawson James.

[Carol Werther:]

Thank you. I was just wondering if you could help us with the milestones that we expect for the end of the year. In particular, will you have any data presented at any scientific meetings in the fall like ESMO or someplace like that?

[Fred Ors:]

Thanks for your question, Carol. Yes. Definitively, we are going to have presentation of data at the upcoming Immuno-Oncology conferences. But I have to say one of the most important milestone that we have upcoming before the end of the year is the final topline results with the Incyte clinical trial, with the 300 milligram dose and we always try to make coincide data release with scientific conferences, but it's really material information for the company as you can imagine and there's always a possibility that the timing doesn't match a conference and that, in this case, for example, for this particular milestone, we just do a press release on the topline data and then present more detailed information at a following conference like ESMO or SITC or some others that are upcoming in the next 6 months.

[Carol Werther:]

Okay. And, any thoughts on the [indiscernible] data and where that might be presented?

[Fred Ors:]

Well, I think it would be kind of the same conferences. I mean there is - maybe there is - in the case of the DLBCL trial, there is a significant lymphoma conference next year, where it would be a good place, for example, to present the topline of this clinical trial. But generally speaking, we're always targeting the immuno-oncology conferences.

[Operator:]

And our next question comes from Doug Loe with Echelon Wealth.

[Doug Loe:]

Just a couple of things for me, most of your milestone commentaries was DPX-Survivac focused, which is a proportion but not all of your DepoVax pipeline of course. So just wondering if you had any feedback from Dana-Farber on timelines reporting early phase I data from your HPV associated cancer program there? And then second of all, just on the DPX-RSV program, you've had some positive immunologic data for your SH protein-based formulation for nearing a couple of years now, and you stated in your MD&As recently that you don't expect to move forward with more substantive clinical studies until partnership interest is forthcoming. So just, maybe an update on what development initiatives likely going on in the background there and just what sort of feedback you're getting from partners and over what timeline you think that program could be resurrected? And I'll leave it there.

[Fred Ors:]

Thank you, Doug. So first on the HPV cancer trial happening in Dana-Farber Cancer Institute, just as a reminder this is a product of Dana-Farber, they are using our delivery platform to treat HPV cancers. It's an investigator-sponsored trial. We are still hoping that and I think that's what is in the MD&A is that before the end of the year, we should have an update on this trial. But again, like I said earlier, the challenge sometime with investigator-sponsored trial is that, this is not our data, this is the data at Dana-Farber and they kind of have the final say on when they are ready to release that data. On the RSV, so just want to clarify that we are still doing some activities in RSV. And after the Phase I clinical trial, what we decided to do is, after discussing with potential partners, we identified a need for those partners to do most studies to prove the mechanism of action of that target. As you know, that target is completely new; everybody is pursuing another target, which make it potentially a great opportunity. At the same time, the mechanism of action is kind of higher because it's different from anything else. So what we've been doing is different studies, preclinical studies mainly, to be able to prove the mechanism of action of that target and place the company fully in the position where we could have more advanced discussion with potential partners. So those studies have been ongoing and we are still planning to provide an update on those programs before the end of Q3.

[Operator:]

Thank you. We have a question from - I'm sorry, that's all the time we have for questions. I'd like to thank everyone for participating in today's conference. This concludes today's program. You may now all disconnect. Everyone, have a great day.