IMV Inc.
Q3 2018 Earnings Call Transcript

Published: 2 Nov 2018

[Operator:]

Good day, ladies and gentlemen, and welcome to IMV's Third Quarter 2018 Earnings Conference Call. At this time, all lines are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be provided at that time. [Operator Instructions]. I would now like to introduce your host for today's conference, Pierre Labbé, CFO of IMV. Please go ahead.

[Pierre Labbé:]

Thank you, James. Thank you, everyone for joining us today for our conference call. I'm Pierre Labbé, CFO at IMV. And joining me on the call today is Fred Ors, our CEO. And also joining 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 involve known and unknown risks and uncertainty that could cause IMV 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 and timing completion of clinical trials, the receipt of all regulatory approval and other risks detailed from time to time in our ongoing quarterly filing 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 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 at www.sedar.com and on EDGAR at www.sec.gov/edgar. I will now turn the call over to Fred Ors, our CEO. Fred?

[Fred Ors:]

Thanks, Pierre. Good morning and thank you all for joining us today. I will start with a brief update on our clinical programs and other business highlights and then I will hand it back to Pierre to review our financial levels. We have made good progress with several of our clinical program in this quarter. In mid-September, we announced early positive results from an ongoing investigator sponsored Phase 2 clinical trial of our lead candidate DPX-Survivac in combination of low dose cyclophosphamide and Merck's Checkpoint Inhibitor to that in patients with persistent or recurrent/refractory diffuse large B-cell lymphoma or DLBCL. The preliminary data included assessment of safety and clinical activity for our first four available patients who have completed their first CT scan after the start of treatment. The data showed that three of the first four available participants had tumor regression at the first on-treatment CT scan. The first enrolled participant demonstrated a tumor regression of 48%, the second demonstrated a partial response he had a tumor regression of 66%, and the third demonstrated stable disease with a 5% tumor regression. The other participant had early disease progression less than two months following treatment initiation and was discontinued from the study. The safety profile of the combination therapy appears to have an acceptable safety profile with no serious adverse events reported to-date. The data we believe is very promising and we are encouraged by these early results and the signs of clinical activities that we see in DLBCL. The trial is expected to enroll 25 participants with DLBCL expresses survivin; a tumor antigen expressed in approximately 60% of these DLBCL patients. The study's primary endpoint is to document the objective response. The secondary objective include measuring, tumor regression, and documenting toxicity profile and durations of response. Early in September, the company also announced that IMV had expanded clinical program with a collaboration with Merck in a Phase 2 basket trial to evaluate DPX-Survivac in combination with low dose cyclophosphamide and Keytruda in patients with select advanced or recurrent solid tumors across five solid tumor indication. The open label multi-center Phase 2 study will evaluate the safety and efficacy of the combination in patients with bladder, liver, ovarian, or non-small cell lung cancer and its CFC as well as tumors shown to be positive for the Microsatellite instability high, MSI-High biomarker. We are planning to enroll up to more than 200 patients across those five indications at multiple medical centers in Canada and the United States. IMV expect to initiate trial enrollment in the fourth quarter of 2018. In August, we did a collaboration with Incyte, our enrollment was completed for their Phase 1b cohort in the advent of ovarian cancer clinical trial and the first patient was dosed into Phase 2 portion of the program. We have completed the enrollment in Phase 1b with a total of 53 patients across two dosing groups in the study and the Phase 1b study the remainder is evaluating the safety and efficacy of combining DPX-Survivac with Epacadostat 100, or 300 milligram dose and this with low dose cyclophosphamide this is individuals with advanced platinum sensitive and resistance of ovarian cancer. Top-line data from the Phase 1b is expected to be announced in the first quarter of this year. We plan to enroll up to 32 patients in the Phase 2 cohort which will evaluate DPX-Survivac and low dose cyclophosphamide with or without Epacadostat in patients with advanced ovarian cancer. And the goal of these Phase 2 program is to evaluate the clinical contribution of each drug, DPX-Survivac and in combination with cyclophosphamide versus the combination with Epacadostat. As a reminder earlier this year, we announced positive data from the Phase 1b dosing arms in an oral presentation at the 2018 meeting of the American Society of Clinical Oncology or ASCO and the data showed that DPX-Survivac generated survivin-specific T-cell responses in 100% of 10 out of 10 evaluated patients. Patients with T-cell infiltration showed partial responses with significant and durable tumor regressions lasting more than one year at the time of the data cutoff and still ongoing. This analysis from this first dosing cohort established for the first time in a clinical trial of correlation between partial to partial tumor regression and providing specific tumor T-cell infiltration generated by DPX-Survivac. To our knowledge this is also the first demonstration that a targeted T-cell therapy can generate significant tumors engages in a solid tumor. So we are very encouraged by what this demonstration means for the potential of our technology. And when you combine the activity of DPX-Survivac, the long-duration of responses, and the absence of systemic toxicity, DPX-Survivac really stands out as a very unique value proposition for patients. With that as a clinical update, I will now ask Pierre to review our financial results for the third quarter. Pierre?

[Pierre Labbé:]

Thanks, Fred. Please keep in mind that all the numbers that I will be discussing are in Canadian dollars. The net loss for the third quarter was $6 million or $0.14 per share. The R&D expenses in the quarter increased by $2.6 million to $3.9 million for the three months period ended September 30, 2018, compared to 2017. These increases primarily reflected two new Phase 2 clinical trials collaboration with Merck in Ovarian and DLBCL which started in 2018 and also cost related to the preparation of the basket trial. G&A expenses of $1.9 million increased by $981,000 for the three months period ended September 30, 2018, compared to 2017. These increases are mainly explained by an increase of $253,000 in stock base and different share unit compensation, the increase in insurance premium following the NASDAQ listing for $157,000, non-recurring expenses related to the relocation to our new facility for $86,000, and increase in legal, audit, and consulting fees. For the first nine-months of 2018, IMV’s cash burn rate was $11.9 million. Based on the current business plan, we forecast the cash burn rate to be between $4 million to $4.5 million in the last quarter of 2018 depending on timing of certain clinical expenses. As of September 30, 2018, the company had cash and cash equivalent of $20.3 million compared to $15 million as of December 31, 2017. We estimate the company to be well funded with cash until Q4 of 2019. As of today, the number of issue that is outstanding common share is 44.9 million and 46.9 million shares on a fully diluted basis. I will now turn the call back over to Fred for his closing comments. Fred?

[Fred Ors:]

Thanks, Pierre. As you can we were quite busy in the third quarter. In summary, we now have eight Phase 2 combination trials ongoing in six cancer indications through company's collaborations with Incyte and Merck. And importantly the company has successfully kept all rights on its lead clinical asset DPX- Survivac with no first sign of refusal. I will also want to remind you that we also have a arm of ongoing as monotherapy as part of the future trial we are doing with Incyte and we are quite excited about this arm as well. There are very few new agents in immunotherapy that have shown monotherapy or single-agent activity and we’re very excited about this. We are pleased to that we reached important milestone, across several of our development program, our adult in ovarian cancer has consistently demonstrated that our proprietary cell technology can generate tumor regressions in solid tumors. And important goal of the company is to provide patients with more treatment options which we are doing by expanding our clinical programs to include others have to treat and underserved cancer indications. Although early, we are very encouraged by the initial activity we're seeing with DPX-Survivac in combination with Merck's Keytruda in blood cancer that DLBCL where our Checkpoint Inhibitors although have shown only modest anticancer activities so far. We anticipate continued progress over the next year and we expect to report the following. Top-line data from the higher dosing cost in the clinical trial with Incyte, top-line data from the triple combination Phase 2 trial with Merck and DLBCL, initial data from second triple combination Phase 2 trial with Merck in ovarian cancer and preliminary data from the Phase 2 basket trial in collaboration with Merck in those multiple solid tumor indications. We look forward with you on this ongoing event. Thank you for being on the call this morning. Operator, we are now ready to take questions.

[Operator:]

Thank you. [Operator Instructions]. Our first question comes from Endri Leno with National Bank. Your line is now open.

[Endri Leno:]

Hi, a couple of questions from me, first I just wanted to clarify a little bit the timeline for the ovarian cancer trial with Incyte, which data are you reporting in the fourth quarter that was referred to in the press release?

[Fred Ors:]

It's the top-line patients on the 53 patients that have been enrolled across the two different doses of Epacadostat.

[Endri Leno:]

Okay. And it’s going to be for both doses the 100 and 300 milligram?

[Fred Ors:]

Right.

[Endri Leno:]

Okay, thank you. Next question, just how was the enrolment going for the Merck basket trial?

[Fred Ors:]

The Merck basket trial is -- so we said that we would initiate enrolment in the last quarter. So we will as soon as we have the first patients enrolled we will like we've always been, like we've always done will issue a press release and but we have a significant number of sites line-up. So we expect to have good enrolment for this trial.

[Endri Leno:]

Okay, thank you. Next question from me and I will get back on the queue before I pull up with something else. But you had on the presentations on the website, you mentioned potential meeting with the FDA for an ACCELERATION Trial in 2019, have you booked this with meeting with the FDA yet or it’s still in the works?

[Fred Ors:]

It’s still in the work but this meeting is going to happen but we’re very confident we can have this meeting before the end of the year.

[Endri Leno:]

Okay. The meeting is going to be before the end of the year?

[Fred Ors:]

Yes.

[Endri Leno:]

Okay, great, thank you.

[Fred Ors:]

The goal Endri is to present the top-line results that we were discussing in your first question.

[Endri Leno:]

Okay, great. Thanks. I will hop back in the queue and I will ask another question.

[Operator:]

Thank you. Our next question comes from Carol Werther with Dawson James. Your line is now open.

[Carol Werther:]

Thank you. I was just wondering if you can discuss with us what would be the results or good results that we’re looking at ASMO IO.

[Fred Ors:]

Well, I think that we already had provided very good results in the sense that this trial is the first efficacy trial with DPX-Survivac a major operating theme of this trial was first prove to met the clinical demonstration that with this technology, and again, I would repeat it for the first time ever we can make a demonstration that we can trigger significant regression of solid tumors and we believe it's the first in the space that targeted T-cell therapy lead to those type of regressions, I won't believe that CAR-T and CR Technologies has made these demonstration yet. So we are very excited and very impressed by what we have seen in the first quarter and for us the top-line results is really confirming what we have seen and like I was referring earlier in the answer from Endri is being able to present these data to the FDA and being able to design the path to registration for DPX-Survivac that hopefully will be an accelerated path.

[Operator:]

Thank you. [Operator Instructions]. Our next question comes from Doug Loe with Echelon Wealth & Partners. Your line is now open.

[Doug Loe:]

Thanks operator and good morning gentlemen. A couple of things from me, one on DPX-Survivac and then one on other things, I wondered if you could maybe just kind of go through some of the key points and rationale on the solid tumors that you selected to incorporate into the basket study. I assume that a lot of the rationale was just based on target markets for Keytruda or markets where it's actively advancing in Phase 3 itself independent of DPX-Survivac relevant to those cancer markets. But I was wondering are there any, is there any relevance to levels of survivin expression of PD-1, PDL-1 expression. Just any sort of biochemical rationale that might be -- might give us some sense of which of those cancer markets might preferentially see activity over others. So that's the first thing. And then second of all is most of your commentary was obviously DPX-Survivac focused but you of course have long pipeline of DPX-formulations with other partners including the HPV program with Dana-Farber and cattle vaccine program with Leidos -- or sorry the malarial program with Leidos, cancer vaccine program with Zoetis. So I just wondered if there are any other key events that we should be looking forward from your partner pipeline that could remain to two clinical activities over the next say three to four quarters. And I'll leave it there. Thanks.

[Fred Ors:]

Thank you, Doug. So -- on your first question I think you highlighted the main criteria that was used to select dose indications, so it was a combination of where are the best opportunities for DPX-Survivac. So a combination of having indications where Survivin has been documented to be highly expressed and playing an important role for a specific indication and the market opportunity in terms of size, but also in terms of where is the unmet medical need and what can we expect DPX-Survivac could have to Keytruda in some of the markets where Keytruda is already approved. And just a final consideration that if you look at, the range of indication that we have, you will notice that we were able to in discussion with Merck to go across very different spectrum of activity for Keytruda which was important for us in the sense that it's really our most extensive clinical trial with Keytruda and we wanted to get a sense when the benefits could be higher. So if you look at the response rates for example in ovarian versus the response rate in MSI-high with Keytruda those are very different, type of solid tumor indication. And we believe that information from these first trials can be very key for us in the future development of DPX-Survivac in combination with Keytruda but also in combination with any other checkpoint inhibitors that we might -- we might combine with in the future. The second question was on the other products that IMV is developing in collaboration with partners. So just as a reminder we said that in our business plan, our goal is to focus on the development of DPX-Survivac. Doesn't mean that we are not open to exploring our use of our platform with partners and we have a number of ongoing collaborations with Dana Farber, Leidos, and some others. The way we are approaching those collaborations and program is that before we want to see evidence that that is a very strong business case in any of the collaboration before communicating on each, in a sense those programs are exploratory programs and we do expect to answer your question that some of those program will deliver results, whether the company will decide to communicate on these results will depend on if there is a clear path forward that we can articulate and project that we can talk about depending on the results.

[Operator:]

Thank you. Our next question comes from Ted Tenthoff with Piper Jaffray. Your line is now open.

[Ted Tenthoff:]

Great, thank you very much and Happy Friday. I apologize if this question was asked but I just joined the conference a little bit late, from with respect to the data coming up in December about how many patients should that be?

[Fred Ors:]

Hi Ted, yes its 53, 53 patients have been enrolled in the trial and so we're going to report on those 53 patients.

[Ted Tenthoff:]

Great, thanks for giving an update. And also really excited to hear more about the solid tumor basket study, I think that's really interesting program. Thank you very much.

[Fred Ors:]

Thank you.

[Pierre Labbé:]

Thank you.

[Operator:]

Thank you. And we do have a follow-up from Endri Leno with National Bank. Your line is now open.

[Endri Leno:]

Hey guys. Just a quick question from me, for the data on the Q4 the 53 patients, is there any I mean sort of specific date or date range are you presented in with any conferences or when you done analyzing them?

[Fred Ors:]

So we have been accepted to present a poster on conference call ESMO Immuno-oncology in Geneva from the December 13 to 16. So you can expect that data will be published at that time.

[Operator:]

Thank you. And with that, I’m showing no further questions in queue. So I'd like to close today's conference with a very kind thank you for everybody to join. We do thank you for your participation and you may now disconnect. Have a wonderful day.

[Fred Ors:]

Thank you.

[Pierre Labbé:]

Thank you.